|Trying to understand|
newly proposed VAT rules
Yesterday - as part of its Digital Single Market Strategy - the EU Commission unveiled proposals for new tax rules with the objective of supporting e-commerce and online businesses in the EU.
Among the measures proposed, there is one that may be of interest also from a copyright perspective.
New VAT rules for e-publications
The Commission proposed in fact to apply the same VAT rate to e-publications, eg e-books and online newspapers, as for their printed equivalents, thus removing provisions that excluded e-publications from the favourable tax treatment allowed for traditional printed publications.
As explained in the relevant proposal, according to the VAT Directive electronically supplied services including electronically supplied publications have to be taxed at the standard VAT rate (minimum 15%). On the other hand, Member States have the option to tax publications on any means of physical support at a reduced VAT rate (minimum 5%) and some Member States were granted the possibility to continue to apply VAT rates lower than the current minimum of 5% (super-reduced rates) including exemptions with the deductibility of the VAT paid at the preceding stage (so called zero rates) to certain printed publications.
Readers may remember that, not long time ago, in the context of actions [European Commission v France, C-479/13, and European Commission v Luxembourg, C-502/13] that the EU Commission had brought against France and Luxembourg over their VAT regime, the Court of Justice of the Union (CJEU) ruled [here and here] that, unlike analogue publications, Member States [like France and Luxembourg] cannot apply a reduced VAT rate to e-books. The court held in fact that, for the purpose of Article 98(2) of the VAT Directive,
The result [see p 2] of all this has been "a markedly less favourable VAT treatment of e-publications in most Member States": a situation that the new VAT regime is meant to remedy.
The proposed amendment of Article 98 of the VAT Directive does in fact exclude e-publications from the treatment reserved to "electronically supplied services", although - it would seem - not from their general classification as "electronically supplied services".
What are the copyright implications of all this? Well, it would appear - potentially - that analogue and electronic copies of protected works should be subject - if not to the same classification - at least to the same treatment.
But in what sense?
The scenario that immediately comes to mind - being also unsolved at the level of CJEU jurisprudence (at least for subject-matter other than computer programs) - is that of digital exhaustion.
Readers will promptly recall that in its
Following that decision, it has remained uncertain whether the same conclusions can be also extended to works falling under the InfoSoc Directive.
In its 2015 decision in Allposters, C-419/13 [Katposts here] the CJEU appeared to suggest that exhaustion under Article 4(2) of the InfoSoc Directive only applies to the tangible support (corpus mechanicum) of a work, and would not extend to the work incorporated therein (corpus mysticum). Being devoid of any tangible support, this might mean that the right of distribution in a digital copy would never be exhausted. At the time of the Allposters decision I wrote an article [here for a pre-edited version] in which I also referred to the CJEU decision in European Commission v France to come indeed to the conclusion that, albeit rooted within a very specific (analogue) background, in that judgment the CJEU appeared to rule out any possibility of having digital exhaustion under the InfoSoc Directive.
The AG Opinion in VOB
After all I might have been wrong, in the sense that this conclusion might have been premature.
Although in the recent VOB case [C-174/15 - a reference for a preliminary ruling asking if EU law allows libraries to e-lend works in their collections] both Advocate General (AG) Szpunar in his Opinion [here] and the CJEU in its judgment [here] ruled out that addressing the issue of digital exhaustion under the InfoSoc Directive would be relevant to addressing the questions referred by the Dutch court, that case has something to tell about digital exhaustion under the InfoSoc Directive.
Of particular interest is the AG Opinion.
First, the AG dismissed the idea that Allposters could call "into question [or limit] in any way the conclusions which follow from the Usedsoft judgment." [para 54].
|No differences in digital |
and analogue publications either