Earlier this month, the European Court of Justice, the top court in the European Union, ruled that eBooks are not true books, but electronic services. The move means that France and Luxembourg, which had been taxing eBooks at the same rate as paper books, would need to begin charging the same value-added tax on eBooks as they do on services.
In both nations, physical books are taxed at a lower rate than services, but in 2013 the European Commission said the lower tax on eBooks was illegal.
The countries said they would fight the court’s ruling. The court, meanwhile, stated the only way it could change its ruling is if the European Commission changes its laws regarding taxation.
The commission does plan on reviewing and making changes to its value-added tax system, but that won’t be until 2016.
There are 28 countries in the EU.
Online bookseller Amazon said it believes both print and electronic books should be taxed at the same rate.
Lower-priced eBooks generate more sales and earn more royalties, the company said.
“The cultural and educational significance of a book is in the content of the author’s work, not its format, be it digital or physical,” Amazon spokesman Drew Herdener said in statement emailed to the Wall Street Journal.
Amazon had previously sold eBooks through Luxemburg in order to take advantage of the lower value-added tax. The practice was made illegal at the beginning of the year, and now value- added tax is based on where the customer is located, not the location of the book seller.
In Europe, eBooks made up 4.5 percent of book sales in 2013, according to Statista. In 2017, they are expected to be 20 percent of sales.
What do you think? Do you think that eBooks are books or electronic services? Why?
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