The EU VAT Directive does permit reduced VAT rates for print books. However, it never considered the case for digital books. Countries therefore have no right to equalise the digital book rate down to the print book rates.
However, Luxembourg has a 3% VAT rate on ebooks, which has encouraged major ebook providers to locate their EU headquarters there, e.g. Amazon. This enables the companies to only charge the 3% VAT rate to any consumer around Europe. However, this loophole in EU VAT will be closed on 1 January under B2C digital services VAT reform 2015.
But the EC is pursuing Luxembourg and France for their use reduced VAT on ebooks. Finland has also referred its views to the Court, and asked for clarification.
