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EU - EROTIC CENTRE MUST PAY TAX ON PREVIEW BOOTHS
By: Laudi Jaterka, Staff Writer - 03-29-10 - 8:30 a.m PDT
Email Laudi@JRLChartsonline.com
Sex shops that show movies in preview booths are not entitled to charge their customers at a lower sales tax rate meant for cinemas, the EU high court ruled Thursday March 18, 2010.The High Court stated that Belgium was right back in 2004 to recoup almost ?50,000 ($70,000 USD) in unpaid value added taxes from the "Erotic Center," a sex shop in the city of Ghent.
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The store charged customers only a 6 percent VAT tax, not the usual 21 percent, because it claimed its preview booths are actually cinemas. Entertainment, culture and sports venues are subject to tax at the reduced rate.
The Court of Justice of the European Union said an adult films be it gay or heterosexual, are played in preview booths are not a theater because it is private, coin-operated and allows viewers to switch from one movie to another.
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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 Adult Bookstore case came to the EU high court after a Belgian appeal court asked for a ruling on tax exemptions.In 2004, the Belgian government billed the Erotic Center $ 48,454-the amount in tax evaded in the first half of that year-plus a fine of $4,840.
