Your run-of-the-mill tax dispute is a dry affair.
But now comes case C-3/09, Erotic Center BVBA v. Belgian State, before the European Court of Justice.
The question at law: Can a peep-show purveyor enjoy the reduced sales tax applied to cinema operators? Or, to put it another way, What is Art?
Let’s rewind this film a bit. The European Union requires its 27 member countries to collect value-added tax on the purchase of most goods and services. The rate must be at least 15% (Belgium charges 21%), but certain special items–food, medicine, books and mortuary services, for instance–get a better deal (6% in Belgium).
One item on the EU-approved low-tax list: “admission to shows, theatres, circuses, fairs, amusement parks, concerts, museums, zoos, cinemas, exhibitions and similar cultural events and facilities.” (Page 69 of this document, for the scholars following along.)
The Belgian tax authorities, seeing little in the way of culture, ruled that the coin-op peep machine of Erotic Center, a naughty-flick emporium in the charming medieval city of Bruges, is an “automated recreation device” and thus not eligible for reduced tax. (Erotic Center sees it as “cubicle cinema.”)