It has just been announced that the European Court has found against the French government and for the Commission in the matter of France’s reduction of VAT for e-books from 20% to 5.5%. The French government will now have to restore VAT to its former level.
The reason for the Court’s decision is that the e-book continues to be regarded as the provision of a “service” rather than the provision of purchased good. Quite why they come to this decision is not further explained in the news item I found on the subject, but exactly what kind of “service” is provided once you have “bought” an e-book seems difficult to discover.
The fact that it is not a service can be demonstrated by the question, if, at some time in the future, the e-book provider went out of business, who would continue to provide the “service”? I would still have the e-book on my reader or iPad and could continue to treat it as a book, or I could delete it and never bother with it again. What kind of “service” continues to be provided to me if I no longer have the book? It is gone, just as a physical book would be gone, if I put it in the waste paper recycling bin.
Perhaps we haven’t heard the last word on this – it would be interesting to hear the e-book publishers floundering as they tried to explain the concept of an e-book “service”!