Luxembourg raises ebook VAT to 17% May 2015
- European News
- 19 March 2015 | Richard Asquith
Luxembourg has announced that it will reclassify e-books from its reduced VAT rate of 3% to its standard VAT rate of 17% from 1 May 2015.
The announcement was made this week following the European Court of Justice ruling on 5 March 2015 that France and Luxembourg must charge higher VAT on ebooks. Luxembourg has originally dropped its e-book VAT rate to 3% in 2013 but was referred to the ECJ by the European Commission for incorrectly charging a reduced rate in contravention of the EU VAT Directive. The ECJ highlighted that Luxembourg's reduced rates should be at least 5%. The ECJ also ruled the same day that France should return e-books from its reduced VAT rate of 5.5% to its standard VAT rate of 20%.