Belgian justice

Adult theaters with “private
cubicles” can’t benefit from a lower sales tax rate usually
reserved for cinemas, the European Union’s highest court said in
a dispute triggered by a Belgian sex shop.
While cinemas give people “the right collectively to enjoy
the cultural and entertainment services,” the EU list of such
places exempt from higher taxes “does not 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,” the
European Court of Justice in Luxembourg ruled today.
Erotic Center BVBA, a Bruges sex shop, argued its coin-
operated cabins qualified for the reduced 6 percent rate of
value added tax instead of the standard rate of 21 percent. A
Belgian court sought guidance on whether establishments fell
into the list of services, such as theaters, concerts, and
cinemas that can claim lower VAT under EU law.
VAT is a consumption levy charged on goods and services,
similar to a U.S. sales tax. Today’s ruling contradicts the
decision by the Netherland’s Supreme Court in 2008 to allow
adult theaters to apply for lower VAT rates, because the
definition for music and theater performances should “be
interpreted broadly.”
The case is C-3/09 Erotic Center BVBA v Belgian State.