Under the Principal VAT Directive, member states may apply a reduced rate of VAT to printed publications such as books, newspapers and periodicals. However, digital publications must be subject to the higher rate. The only exception is digital books supplied on a physical medium, such as a CD-ROM.
The higher rate of VAT therefore does not infringe the principle of 'equal treatment', the advocate general said, in response to a query from the Polish Commissioner for civil rights. Advocate general opinions are advice for CJEU judges and are not binding, though they are followed in the majority of cases.
It would be for the EU legislature to look at the degree of competition that exists between printed and electronic publications, but this will differ from state to state and perhaps over time, the advocate general said. It is therefore the role of the legislature and not the Court of Justice to make this complex assessment, she said.
The difference in taxation is proportionate, the advocate general said, in that digital books transmitted by electronic means are usually sold a lower price than physical books, despite the higher rate of VAT.
In March 2015, the Court of Justice of the European Union (CJEU) ruled that France and Luxembourg must stop applying reduced levels of VAT to electronic books.
Both France and Luxembourg, with the support of Belgium, had argued that electronic books are covered by 'Annex III' of the VAT Directive, which allows reduced VAT on certain goods including paper books.
However, the Court agreed with the European Commission's argument that as the Annex refers to the "supply of books … on all physical means of support", it is only applicable to "the supply of a book found in a physical medium".