Taxation in a Global Digital Economy

1. S. 330Peculiarities of Electronic Publication in the Indirect Taxation Frameworks

1.1. Taxation on Electronic Publications

The VAT treatment of electronic publications has been subject to a lively debate in the European Union (EU). France and Luxembourg applied a reduced rate to electronic books, giving publishers established in those countries a significant advantage over their competitors. This was because, until 31 December 2014, supplies of electronic services to final consumers were governed by the VAT law of the country of the supplier. Both countries claimed that the electronic format was an alternative physical means of support and that a different treatment of books and e-books violated the principle of neutrality.

Electronically supplied services have been the focus of the European Union VAT policy on e-commerce since the early 2000s. The European Union acted quickly to adopt specific rules for online supplies in line with the 1998 OECD Ottawa Framework for e-commerce transactions. The European Union adhered to the OECD recommendations in its harmonized VAT system by means of a Directive on, inter alia, ‘certain electronically supplied services’, effective since 1 July 2003. Se...