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The European Court of Justice has rejected a challenge brought by the Polish Government concerning the inability of member states to levy a reduced rate of value-added tax to electronic publications, which would be in line with the VAT treatment of tangible publications.
The case concerned whether the European Parliament had the opportunity to be sufficiently involved in the legislative procedure for the adoption of point 6 of Annex III of the EU VAT Directive.
Under this provision, 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 standard rate of VAT, with the exception of digital books supplied on a physical support (for example a CD-ROM). This was confirmed in a relatively recent ruling from the European Court of Justice, which had outlawed reduced rates levied by Luxembourg and France, in European Commission v. France (Case C-479/13) and European Commission v. Luxembourg (Case C-502/13).
In a ruling on March 7, the ECJ pointed out that the European Parliament should be consulted upon afresh when the text finally adopted, as a whole, differs in essence from the text on which the Parliament has already been consulted, except in cases where the amendments substantially correspond to a wish of the Parliament itself.
The Court examined whether fresh consultation of the Parliament was necessary so far as concerns the provision of the directive limiting the application of a reduced rate of VAT to solely the supply of books on a physical support.
The Court held in this regard that the final text of the provision concerned is nothing other than a simplification of the drafting of the text, which was set out in the proposal for a directive, the substance of which was fully preserved. The Council was therefore not required to consult the Parliament afresh, the Court ruled, saying that the provision of the directive is not invalid.
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