E-Book Tax Raises Price and Hackles

The EU has recently ruled that e-books sold in Europe constitute an electronically supplied service and are subject to higher taxes (VAT) than physical books. This could raise the price of e-books in some countries.

This change will primarily impact France and Luxembourg. Ironically, these are the two countries that created the need for the ruling when they petitioned the EU’s Court of Justice to be allowed to sell e-books at the VAT rate of regular books. With the new ruling, the VAT rate in France will increase from 5.5% to 20%. In Luxembourg, the rate will go from 3.5% to 17%. Counties such as the UK and Germany, which already sell e-books at the higher tax rate, won’t have any affect.

France and Luxembourg both say that they will fight against the new tax. As French Culture Minister Fleur Pellerin said, “We will continue to push for what is called technological neutrality, meaning the same taxation for books, irrespective if they are on paper or electronic.”

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