Update: State of Compliance following the March 2015 Judgment of the ECJ

Jill Grenier
August 5, 2015

This blog was last updated on June 27, 2021

EU Court Rules E-Books Are Services, Not GoodsUpdate to previous post. Update 8/4/2015 Sovos Compliance has continued to monitor the repercussions of the ECJ’s decision in March and would like to report on some major developments since our last blog posting. In response to the decision of the European Court of Justice (ECJ) in European Commission v. Grand Duchy of Luxembourg (Case C -502 / 13), the Luxembourg Ministry of Culture issued a press release stating that Circular No. 756 providing for the application of the super-reduced rate of 3% will not be applied. Thus, on March 16, 2015, Circular No. 756bis repealed Circular No. 756 of 12.12.2011 which specified that the term “book” does not distinguish between physical media and digital media and that the same rate which applies to books would apply to e-books.  This repeal was effective May 1, 2015 and as such, Sovos Compliance updated all relevant digital content to reflect the standard rate of 17% in Luxembourg. Shortly after the ECJ ruled that e-books are not considered “books” under EU law, the Culture Ministers of Germany, France, Poland, and Italy released a joint statement urging the European Commission (EC) to enable Member States to charge the same VAT rate on e-books as they do on paper books. The Culture Ministers called for an end to “the unjustifiable discrimination towards e-books,” arguing that “a book is a book no matter what form it is.” It remains to be seen, however, whether the EC will actually seek to change the law by updating the EU VAT Directive. Not surprisingly, France has made no move towards a modification of French law and doctrine. Therefore, e-books remain subject to the reduced VAT rate in France.  Same goes for Italy. However, Italy still faces the risk of a referral from the European Commission to the ECJ similar to that suffered by France and Luxembourg. Please stay tuned as we will be posting any further developments as they arise.

Sign up for Email Updates

Stay up to date with the latest tax and compliance updates that may impact your business.

Author

Jill Grenier

Jill Grenier is a Lead Tax Counsel in the Regulatory Analysis department at Sovos. Jill joined the team in 2006 and focuses on understanding and supporting VAT rules in the European Union, while also keeping abreast of sales and use tax changes in a number of US states. She is a member of the Massachusetts Bar and Massachusetts Bar Association and is also admitted to practice before the United States District Court for the District of Massachusetts. Jill has a B.A. from Boston College and a J.D. from Suffolk University Law School. Jill is also proficient in French.
Share this post

2025 tax filing season
North America Tax Information Reporting
November 21, 2024
Top 5 FAQs to Prepare for the 2025 Tax Filing Season

This blog was last updated on November 21, 2024 While “spooky season” may be over for most of us, the scariest time of year for many businesses is right around the corner: tax filing season. As they brace themselves for the flood of forms, regulatory updates, and tight deadlines, the fear of missing a critical […]

dtc shipping law updates
North America ShipCompliant
November 13, 2024
DtC Shipping Laws: Key Updates for Alcohol Shippers

This blog was last updated on November 13, 2024 When engaging in direct-to-consumer (DtC) shipping of alcohol, compliance with different state laws is paramount and so keeping up with law changes is critical. In 2024, the rules in several states for DtC have already been adjusted or will change soon. Here is a review of […]

sales tax vs. use taxes
North America Sales & Use Tax
November 8, 2024
Sales Tax vs. Use Tax, Explained. Who Reports What, and When?

This blog was last updated on November 19, 2024 One of the core concepts in sales tax compliance is also one of the most frequently misunderstood: the differences between sales tax and use tax. These tax types may look similar on the surface, but knowing the differences is essential for staying compliant and avoiding costly […]

2025 bond project
North America Tax Information Reporting
November 4, 2024
2025 NAIC Bond Project – The Insurer’s Guide

This blog was last updated on November 14, 2024 The regulatory landscape for insurance companies is undergoing significant changes with the Principles-Based Bond Project which is set to take effect on January 1, 2025. These changes, driven by the National Association of Insurance Commissioners (NAIC), will impact how insurance companies classify and value bond investments, […]

E-Invoicing Compliance EMEA VAT & Fiscal Reporting
November 1, 2024
VAT in the Digital Age Approved in ECOFIN

This blog was last updated on November 7, 2024 The long-awaited VAT in the Digital Age (ViDA) proposal has been approved by Member States’ Economic and Finance Ministers. On 5 November 2024, during the Economic and Financial Affairs Council (ECOFIN) meeting, Member States unanimously agreed on adopting the ViDA package. This decision marks a major […]