Since 4 December 2018, the Member States have been free to apply the reduced VAT rate to e-books. In our opinion, applying the reduced VAT rate should now be considered mandatory. E-book suppliers would, in particular, benefit. If they have agreed upon gross prices with their customers, the reduced VAT rate increases their margin. Taxable persons, such as libraries, universities or other public institutions, which are often not entitled to input VAT deduction for the purchase of electronic publications from abroad but have to pay VAT (reverse charge scheme), would also benefit. However, the changed legal situation can pose new VAT challenges e.g. in instances where the various contents of databases are to be treated differently.