No tax breaks on porn booths: EU court
(LUXEMBOURG) - Individual booths used to watch porn videos cannot be classified as cinemas and therefore are not eligible for VAT cuts, a European court ruled on Thursday.
The Erotic Center company in 2004 started applying the reduced sale tax rate of six percent, granted to public cinemas, rather than the 21 percent it had been paying.
The company operating, in this case in Belgium, claimed that the cubicles for watching films were covered by the category "establishment for culture, sports or entertainment."
The Belgian government said the booths were actually "automated recreation devices," since the films are started by inserting coins into a machine.
The Belgian courts referred the case to the European Court of Justice in Luxembourg which on Thursday backed the authorities' line.
The EU court decided that the cinema VAT rules cannot cover "the payment made by a customer so as to be able to watch on his own one or more films, or extracts from films, in private cubicles."
Case C-3/09 - European Court of Justice Judgement 2010-03-18 - Erotic Center
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