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02/04/2015 PROFILE > Conseil en formalités , Expert-comptable

VAT: France cannot apply a reduced rate to digital books

Since 1st January 2012, France applied a reduced VAT rate (5.5%) on the provision of electronic or digitised books. Yet, these books in electronic format provided for a fee for download or by streaming from a website to be consulted by a reading device enter under the framework of the European "VAT" directive.

The Court of Justice of the European Union (CJUE), in its order of 5 March 2015 concerning Affair C-479/13, welcomed the appeal for breach by the European Commission against France.

In effect, the Court finds that a reduced VAT rate can only apply to the delivery of property and provision of the services aimed at in Annex III of the VAT directive, that is to say, "the provision of books, on all types of physical support". The Court did not consider electronic books as "books of physical support" given that in this case, such a support (as a computer, for example) is not provided with it. Moreover, the Court noted that the VAT directive excludes any possibility for application of a reduced VAT rate to "services provided by electronic means". It considers the provision of electronic books as constituting such a service.

The French Republic cannot, therefore, apply a reduced VAT rate to digital books.

This order rendered by the Court does not prevent the Member States from establishing a reduced VAT rate on books which are physically supported, particularly paper books.