**A Belgian sex shop owner’s attempt to cut his VAT bill under “cultural exclusions” has been rejected by the European Court of Justice.**The Erotic Cinema in Ghent offers customers private cubicles in which to watch a selection of films.
Its owner claimed it should benefit from the reduced 6% rate of VAT paid by cinema owners, who get a discount under law to promote cultural activities.
Belgium’s standard VAT rate is well above that at 21%.
But the Court ruled that what was on offer at the Erotic Cinema was not the type of cultural activity that qualified for the lower VAT rate.
It ruled that these had to be viewed collectively and be open to all, not something that is viewed in the privacy of a booth.
Not in private
The Court ruled that “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 cannot benefit from the reduced rate of VAT applicable to cinema admissions and other such cultural events”.
The case dates back to 2004, when the unnamed owner of the Erotic Cinema tried to claim VAT at the 6% reduced rate - a move that led to six years of court action culminating in the judgement at the European Court of Justice.