Berwin Leighton Paisner (BLP) is gearing up to challenge HM Revenue & Customs (HMRC) over the Government's application of valued-added tax (VAT) to ebooks, in a move which could have far-reaching ramifications across Europe.

BLP head of VAT Alan Sinyor is leading a bid to force the UK Government to reconsider its position on that taxation of ebooks, on which VAT is currently charged at 20% in contrast to print books, which do not have tax applied.

If the firm is successful it could lead to the price of ebooks coming down.

Sinyor is working on the matter for an undisclosed client alongside contentious tax partner Liesl Fichardt, with the case set to be heard in a First-tier Tribunal- the UK tribunal responsible for cases against HMRC- early next year. The outcome is likely to influence decisions on the application of tax on ebooks more widely across Europe.

The European Commission told Luxembourg last week to scrap its reduced rate of 3% VAT on ebooks and replace it with the country's standard rate of 15% by the end of November this year, with France also told to bring its tax on ebooks up to the country's standard rate. This increase in tax is likely to have a significant impact on companies such as Amazon, which bases its ebook business in Luxembourg.

If BLP is successful it is thought countries like France and Luxembourg where tax on ebooks has been increased could challenge the Commission decision, however it is also possible that another outcome of BLP's challenge could be an increase in VAT on print books.

Sinyor said: "At the heart of this case is the fact that HMRC has based its decision that VAT is due on case law that pre-dates the invention of ebooks. In that context, the issues which we are looking to address are: first, the definition of the word "book" in the modern context; and secondly, the EU principle of fiscal neutrality.

"A subtle but vital point is that the second issue may well have much wider ramifications for the VAT treatment of ebooks across the rest of Europe, not least in light of the current European Commission infraction proceedings against Luxembourg and France."