Mini porn shows lose tax exempt battle
Sex shops showing films in cubicles lost their battle today to charge the same lower VAT rate as ordinary cinemas.
The European Court of Justice ruled that Belgium was right in 2004 to recoup almost £50,000 in unpaid tax from the "Erotic Centre," a sex shop in Ghent.
It charged customers only 6% VAT, not the usual 21%, because it claimed its cubicles were actually cinemas. Culture, sports and entertainment venues are taxed at the reduced rate.
The court said a pornographic film cubicle was not a theatre because it was private, coin-operated and let viewers switch from one film to another.
Public cinemas, the Luxembourg-based court added, "are available to the public on prior payment of an admission fee giving all those who pay it the right collectively" to watch the same movie.
The sex shop case went to the court after a Belgian appeal court asked for a ruling on tax exemptions.
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