EU takes France, Luexmbourg to court over ebook tax rates

The European Commission said Thursday it was taking France and Luxembourg to court for illegally reducing the sales tax levied on electronic or e-books.

The Commission said the law was very clear on the rates of sales tax (VAT) which must be set by EU member states and on what exemptions and reductions were available.

France has levied a VAT rate of 7.0 percent on sales of electronic books since January 2012, well short of the full 19.6 percent which should be levied, the Commission said.

Luxembourg even more blatantly flouted the rules, charging a sales tax of just 3.0 percent.

Such tax levels “amount to serius distortions of competition” to the detriment of other EU member states, the Commission said, adding that it had received several complaints.

The Commission had warned both countries of the problem in July and then in October, given them a month to rectify the VAT rates.

Failing their compliance, the Commission was now proceeding with legal action at the European Court of Justice.