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Peep show puzzle for EU judges
The owner of a Belgian sex shop posed a puzzler for European judges yesterday – does a coin-in-the-slot peep show count as a cinema?
If it does, then it qualifies for reduced-rate VAT under EU tax rules.
Belgium's tax authorities say the cubicles for private film viewing at the Erotic Centre in Bruges are an "automated recreation device", and the owner must pay VAT at the normal rate of 21 per cent instead of six per cent.
Lawyers for the owner told a hearing in the European Court of Justice in Luxembourg that cinemas are explicitly identified as a "cultural exception" under EU VAT rules and only attract the lower VAT rate applied to "normal" cinemas in Belgium.
The case was sent to Luxembourg by a court in Ghent for a ruling on whether the activity of single film viewing, with the viewer able to switch films, can be included in the "cultural exception" clause under the European Union's Sixth VAT Directive.
The exact question posed to the EU court in legal documents asks: "Should a cubicle consisting of a lockable space where there is room for only one person and where this person can watch films on a TV screen for payment, where this person personally starts the film projection by inserting a coin and has a choice of different films, and during the time paid for can continually modify his/her choice of projected films, be regarded as a 'cinema'?
The three-judge panel is not expected to make a site visit, and their verdict, which could affect peep show operators across Europe, is expected later this year.
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Sunday 12 February 2012
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