Exclusion of electronically supplied digital books from the reduced VAT rate


Opinion of the Advocate General in Case C-390/15 Rzecznik Praw Obywatelskich (RPO), in which The Polish Constitutional Court has doubts concerning the validity of that rule. On the one hand, it has doubts as to whether the difference in taxation is compatible with the principle of equal treatment, while, on the other, it is unsure whether the European Parliament was sufficiently involved in the legislative process.

In this sense, we would like to clarify that, regarding this issue, the EU VAT Directive states that Member States may apply a reduced rate of VAT to printed publications such as books, newspapers and periodicals. Digital publications, by contrast, must be subject to the normal VAT rate, with the exception of digital books, provided that they are supplied by means of a physical medium such as a CD-ROM.

According to the opinion of the Advocate General Juliane Kokott the VAT Directive is valid in so far as it applies the reduced rate of tax only to printed books, newspapers and periodicals, as well as to digital books which are supplied by means of a physical medium, for the following reasons:

–          Concerning the kind of publication digital or physical, books on physical media do not compete on equal terms with books in electronic form, as they have different costs of distribution and promotion. For this reason, differential treatment is allowed.

–          Concerning the different way of supply, on a physical support or electronically, the Advocate General understands that although both products are comparable, due to the fact that for customer the same product is involved, namely the file of a digital book, The difference in treatment is, however, justified, particularly in view of the special requirements6 of the taxation of electronic services, which are, under the VAT Directive, excluded entirely from the reduced tax rate.

Finally, so far as concerns the European Parliament’s involvement in the legislative procedure, Advocate General Kokott expresses the view that the Parliament was properly involved and that consequently there can be no doubt as to the validity of the rule of the VAT Directive which is at issue in the present case.

The Advocate General’s Opinion is not binding on the Court of Justice. It is the role of the Advocates General to propose to the Court, in complete independence, a legal solution to the cases for which they are responsible. The Judges of the Court are now beginning their deliberations in this case. Judgment will be given at a later date.

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