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Ecofin adopted the European Commission recommendation for member states to apply the same VAT rates to e-books as printed publicationsPhoto: Perfecto Capucine/Unsplash 

Ecofin adopted the European Commission’s proposal, enabling member states to apply the same VAT rates to e-books as printed publications.

For Luxembourg, it means a return to the 2012-2015 system when the country applied a 3% VAT rate on e-books. In 2014, the European Commission took Luxembourg and France to the European Court of Justice in Luxembourg-Kirchberg saying e-books were an electronic service and therefore their tax rates were too low under EU tax rules. In 2015, the court ruled in favour of the commission, forcing Luxembourg to charge its regular VAT rate of 17% on e-books purchased by Luxembourg residents. France, meanwhile, revised its rate from 5.5% to 20%.

At the time, the Luxembourg government pledged to defend the principle of technological neutrality in tax matters. Its ongoing negotiations paid off and on Tuesday Luxembourg finance minister Pierre Gramegna (DP) welcomed the decision, pointing out that e-books were often cheaper and more environmentally friendly than traditional publications.

“Luxembourg, together with its partners, has succeeded in making its voice heard, defending the principle of technological neutrality,” Gramegna said, adding: “I am delighted that from now on, from a tax point of view, "a book is a book' regardless of its medium.”

Culture secretary of state Guy Arendt added: “I welcome this decision, which puts an end to the difference in VAT rates between printed and electronic publications.”