Porn booths are not 'cultural venues', EU court rules

Mar 18, 2010, 14:51 GMT

Luxembourg - Sex shops which allow customers to watch pornographic films in individual booths cannot be counted as cultural venues in order to get a VAT break, the EU court ruled Thursday.

The ruling centred on a decision that cultural venues are intended for more than one person at a time.

EU rules allow member states to grant reduced VAT rates for entry to cultural venues such as cinemas, museums, zoos and concerts. Thursday's case came after the owner of a porn-booth centre in Belgium applied for the VAT rate normally given to cinemas.

The owner of Erotic Center in the picturesque mediaeval town of Bruges argued that his business, which allows customers sitting in screened booths to watch a variety of porn films on coin-operated machines, counted as a cinema, and should therefore pay VAT at 6 per cent rather than 21 per cent.

The Belgian tax authorities rejected that view, saying that a cinema was, by definition, a place where an audience of more than one person paid in advance to watch the same film at the same time.

And the European Court of Justice ruled that the Belgian tax authorities were right.

Cultural venues, as defined in the EU's VAT rules, 'have in particular the common feature 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 characteristic of those events and facilities,' it said.

'The concept of admissions to a cinema ... cannot be interpreted as meaning that it covers 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,' it ruled.

The ECJ's judgement hands the victory squarely to the Belgian tax authorities. It now falls to them to decide Erotic Center's tax bill.