News details

Super reduced VAT rate of 3% extended to the reception of broadcasted programs

 

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The law of 21 December 2007 undertakes as of 1 January 2008, new tax provisions aiming to, among others, extend the super reduced rate of 3 % VAT to the reception of TV programs.

As of 1 January 2006, broadcasted TV and radio services were subject to a VAT of 3%.

The new provision aims at extending the VAT super reduced rate of 3 % to payments made to TV/Radio distributors with regard the transmission (reception) of such services.

Customers receiving such services will be, under this new provision subject of the super reduced VAT rate.

The administration has clarified in a circular of 27 December 2007 that will benefit from the super reduced VAT rate the reception of paid broadcasted programs whether this broadcast is made by the editors of the above programs or by the distributor.

This super reduced rate is also applicable to the following interventions undertaken by the operators: connection to an electronic telecommunication network; rental technical equipment aimed at decoding the broadcasted programs; and the maintenance operations on these installations.

The new provision also explicitly provides that this super reduced VAT rate is applicable "regardless the transmission means".  Therefore, this provision appears to include online broadcasting services such as IP TV and video-on-demand.

The administration however, excludes from the application of the super reduced VAT rate the services aimed at article 11 of the EU regulation 1777/2005/CE as for instance the downloading of films or music on computers and mobile phones.

The new provision maintains the previous exclusion of adult programs from the benefit of the super reduced VAT of 3 %.

Erwin SOTIRI, Stéphan LE GOUEFF

^{Avocats / Lawyers, LG@vocats, Luxembourg}

 

 

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