'Judge books by their covers', EU court says in tax ruling

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'Judge books by their covers', EU court says in tax ruling

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France and Luxembourg lost a legal battle on Thursday to offer lower sales tax on e-books.

A top European court backed EU regulators that only paper books qualified.

EU rules say the 28 member states can set lower rates of value-added tax on printed books.

The European Commission said two years ago that the 5.5 percent and 3 percent rates imposed by France and Luxembourg respectively are illegal.

Officials said the rates cannot apply to e-books as they qualify as an “electronically provided service.”

Judges at the Luxembourg-based European Court of Justice agreed.

They rejected the argument that e-books should be considered a product, rather than a service.

Publishers and booksellers are angry at losing the legal fight.

Writers, they say, earn more royalties from e-books.

Retailers also say the ruling in Luxembourg will put people off ‘electronic reading’.

They have called on the European Commission to revise the rules.