Watching a dirty movie on your own in a cubicle is not, according to the Court of Justice, a cultural moment coming within the concept of "cinema". So held the Court in its judgment in Case C-3/09 Erotic Center BVBA v. Belgian State.
The Sixth Council Directive 77/388/EEC on value added tax allows the Member States to set a reduced rate of value added tax (VAT) for "admissions to shows, theatres, circuses, fairs, amusement parks, concerts, museums, zoos, cinemas, exhibitions and similar cultural events and facilities."
The Belgian state had first allowed an establishment that projected what can only be described as dirty movies to customers seated individual cubicles to charge the lower rate of VAT of 6% instead of the usual rate of 21%. It then sought to claim the difference on the ground that the establishment in question was not a proper cinema. Erotic Center challenged that claim before the Belgian courts. The Ghent court of appeal then referred the matter to the Court of Justice to ask whether the type of establishment in issue could be characterized as a "cinema" qualifying for the lower rate of VAT.
The Court of Justice held that the concept of cinema does not cover watching a dirty movie on one's own in a cubicle. Consequently, the establishment in question should charge the higher rate of VAT.
Employing reasoning as thin as the plot of the films projected,the Court recalled that the concept of admissions to a cinema must be interpreted in accordance with the usual meaning of those words (Case C-83/99 Commission v. Spain [2001] ECR I-445, paragraph 20 and Case C-109/02 Commission v. Germany [2003] ECR I-12691, paragraph 23. It held that the type of events and facilities which can benefit from the lower rate of VAT have in common that they are available to the public on prior payment of an admission fee giving all those who pay it the right collectively to enjoy the cultural and entertainment services in question. And solitary viewing of porn just does not fill the bill.
concept of cinema to decide vat rate does not seems right.
Posted by: AcaiOptimum | April 01, 2010 at 04:14 AM