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 on 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 Centre 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% rather than 21%.
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.
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