Books Are Services, Not Goods

March 6, 2015 6:14 PM

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BRUSSELS—Electronic books cannot benefit from the same reduced rate of value-added tax as paper books, the top court of the European Union ruled on Thursday. But the European Commission signaled it may change the rules next year to allow for equal taxation of books in any form.

Since 2012, France has applied a value-added tax, or sales tax, of 5.5% on e-books and Luxembourg has applied a 3% VAT rate, the same rate for paper books. The European Court of Justice said both countries must apply to e-books their normal VAT rate, which is 20% for France and 17% for Luxembourg.

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