The European Commission (“Commission”) is taking France and Luxembourg to court for applying reduced VAT rates to the sale of electronic books (“e-books”). Both countries have been applying a reduced VAT rate to supplies of e-books since January 2012. The rate is 7% in France and 3% in Luxembourg. Although printed books are eligible for a reduced rate under current EU law, e-books are not. The supply of e-books is currently considered an electronically provided service and not the sale of a “book”.
The Commission is expected to make proposals by the end of 2013 to end the unequal treatment of e-books and printed books. However, any new rules would not come into force until 2015. Until that time France and Luxembourg could face heavy fines if they are found to have violated EU law.
Read more here: http://europa.eu/rapid/press-release_IP-13-137_en.htm