Since 1 January 2012, France has applied a reduced VAT rate of 5.5% and Luxembourg a rate of 3% to the supply of electronic books, resulting in significant distortions of competition to the detriment of suppliers in the other member states applying VAT at the standard rate in compliance with EU law.

However, the European wide VAT rules introduced in January 2015 mean that bases such as Luxembourg are less beneficial as business to consumer ((B2C) suppliers need to charge VAT at the domestic rate applicable in the country of purchase.