European Union

Luxembourg, France Ordered To Hike Tax on Ebooks

The European Commission doesn't want any tax competition

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Luxembourg and France must stop applying a reduced VAT rate to electronic books because doing so distorts competition across the rest of the EU and is in breach of EU tax laws, the European Commission has said.

The Commission said it had issued both member states with "reasoned opinions" formally requesting that countries change their VAT rules around ebooks within one month to comply with EU law. Countries that do not comply with the requirements of EU law can be referred to the European courts. The Court of Justice of the European Union can order EU member countries to implement EU Directives and fine them if they do not.