Legal Puzzle: Sudoku Books at the Crossroads of EU VAT

What seemed a straightforward business of publishing and selling Sudoku puzzle books for Keesing Deutschland became a complex legal puzzle at the intersection of taxation, language, and international standards for the classification of printed products. 

The issue arose when the German Tax Office pushed back, arguing that the books lacked “real” text and should be subject to the standard VAT rate, while the company applied the reduced VAT rate. Ultimately, the dispute put one critical question under the spotlight: how to interpret legislative language and harmonized classifications when novel or unconventional products fall into a gray area between text, numbers, and symbols.

Background of the Case 

In 2019, Keesing sold paper-bound game books called Sudoku-Varianten Spezial, each with around 100 pages including a preface, legal info, sudoku rules, 88 sudoku puzzles, solutions, and an advertisement. The Sudoku book was published every eight weeks and had a numbered title page with the issue date. The company applied the 7% VAT rate on sales, classifying the books under the Combined Nomenclature (CN) printed books.

However, the Tax Office denied the classification, stating that game books lacked sufficient qualifying text to be considered printed books under CN and should therefore be taxed at the standard VAT rate. The company appealed before the Finance Court, arguing that its Sudoku books should fall under the CN heading 4902 for periodical printed writings.

Furthemore, the company added that the German wording requiring “writing” does not strictly mean letters, and that the English and French CN versions show that regular publication is the key criterion. Moreover, Keesing also claimed that the numbers in the puzzles constitute a system of signs akin to writing and should qualify as a “writing”.

The Finance Court noted that, in Germany, reduced VAT rates depend entirely on classification under the CN, which the legislature used to define goods eligible for the 7% VAT rate, including supplies of periodical printed writings. Nonetheless, the Finance Court was uncertain how to classify the Sudoku books for VAT purposes and referred two questions to the Court of Justice of the European Union (ECJ) for a preliminary ruling.

Main Questions from Request For Ruling

With the first question, the Finance Court asked whether classification under CN heading 4902 requires printed materials to consist mainly of sequences of letters, with the consequence that number-based Sudoku books would be excluded from that heading.

In case the ECJ answers positively to the first question, the second question is whether the principles of equal treatment and fiscal neutrality require the reduced VAT rate to be applied to number Sudoku puzzle books, given that, from the perspective of the average consumer, they fulfil the same function as letter Sudokus and crossword puzzles, already subject to the reduced rate.

Applicable EU VAT Directive Article

To answer the raised questions, the ECJ interpreted relevant provisions from Regulation 2658/87 - Combined Nomenclature on the classification of goods, and Article 98 and Annex III of the EU VAT Directive. Notably, Article 98 allows EU countries to apply one or two reduced VAT rates, but only to goods and services listed in Annex III, and to rely on the CN to define precisely which goods fall within those categories when applying reduced rates. 

Point 6 of the Annex III specifies that reduced rates may apply to the supply of books, newspapers, and periodicals, whether in physical or electronic form, including various types of printed matter such as brochures, children’s books, music, and maps, provided that the publications are not mainly advertising and do not consist predominantly of video content or audible music.

Germany National VAT Rules

Regarding the German law, the ECJ highlighted Article 12(1) of the Law on Turnover Tax, which allows the application of the 7% reduced VAT rate to supplies, imports, and intra-community acquisitions of the goods described in Annex II of the Law.

Annex II of the same Law, among other goods, lists books, newspapers, and other printed products, subject to certain exclusions such as publications harmful to minors or primarily intended for advertising, and newspapers and other periodical printed writings, even if they contain pictures or advertising, provided they are not mainly advertising publications, as eligible for the reduced VAT rate.

International Law

Due to the specifics of this case, the ECJ also interpreted the provisions from the Harmonized Commodity Description and Coding System (HS), developed by the Customs Cooperation Council, now the World Customs Organization. The main reason is that the HS, together with its Annexes, requires contracting parties to align their customs tariffs and statistical nomenclatures with it by using its headings and subheadings, applying its interpretative rules, and following its numerical structure without modification.

Importance of the Case for Taxable Persons

The value of this case lies not only in the ECJ's conclusion and decision on whether the printed Sudoku puzzle books are eligible for a reduced VAT rate, but also in the guidance on interpreting provisions that may differ across languages. 

Since the interpretation of the wording affects how products should be classified for the purpose of applying reduced VAT rates, the clarification on this subject matter is significant for taxable persons, as it may help them understand the logic national authorities and courts should apply when determining which VAT rate applies to ambiguous or novel products.

Analysis of the Court Findings

The first thing ECJ set out straight is that the use of the CN is only one possible method for defining the scope of eligibility for reduced VAT rates. Therefore, as long as the supplies concerned fall within a category listed in Annex III to the EU VAT Directive and the principle of fiscal neutrality is respected, national legislators remain free to choose the classification method they consider most appropriate when determining which goods or services benefit from the reduced rate.

Additionally, although the CN incorporates the HS and the EU is obliged to ensure that its tariff nomenclature conforms to the HS without altering the scope of its headings, EU countries are not strictly bound to define reduced VAT categories that exactly mirror the CN headings. As a result, EU countries may define the supplies eligible for reduced rates by reference to categories that do not fully coincide with the CN, provided that the goods fall within Annex III of the EU VAT Directive and the principle of fiscal neutrality is respected.

In the present case, the Finance Court concluded that, with regard to periodical printed writings, the German legislature relied exclusively on CN heading 4902 when implementing the reduced VAT rate. Since classification under Annex III is a necessary condition for determining whether a reduced VAT rate applies, it falls to the ECJ to clarify the relevant classification criteria and provide guidance. In contrast, the actual application of those criteria remains a matter for the national court.

The ECJ noted that, under General Rule 1 for the interpretation of the CN, goods must be classified according to the wording of the relevant headings and any applicable section or chapter notes. Moreover, the decisive factor in customs classification is generally the goods' objective characteristics and properties. Applying these factors ensures legal certainty and ease of control.

Regarding the wording itself, the ECJ stated that the CN heading 4902 differs across language versions, particularly between German, English, and French. The German Version includes newspapers and other periodical printed writings, including those with images or advertising. The English version mentions newspapers, journals, and periodicals, while the French version states newspapers and printed periodical publications, whether illustrated or containing advertising.

On those occasions, the ECJ recalled that where such linguistic divergences exist in the EU law, the provision must be interpreted and understood in light of the purpose and overall structure of the rules of which it forms part, rather than relying on a single language version alone. Moreover, to ensure the uniform application of an EU measure, the provision must be interpreted in light of both the true intention of its authors and the objectives they seek to achieve, taking into account all language versions of the measure.

Since the EU is one of the contracting parties of the HS, it must ensure that its customs and statistical nomenclatures conform to the HS without altering the scope of its headings. Consequently, the French and English language versions of the CN, which correspond to the authoritative French and English texts of the HS, should serve as the primary references. Notably, both these versions include periodicals under the heading 4902.

The explanatory note to HS heading 4902 states that the key characteristic of the publications covered is that each issue is part of a continuous series under the same title, published at regular intervals, and dated or frequently numbered. Even though these periodicals “usually consist essentially of reading matter”, they may also be heavily illustrated or consist mainly of pictorial content, and they may include advertising.

The ECJ added that the word “usually” in the HS explanatory note indicates that publications composed mostly of text fall within the heading. Still, it also encompasses periodicals whose content is predominantly non-textual. Regarding the word “printed”, the ECJ noted that general considerations in the HS explanatory notes make clear that the term is not limited by the form of the characters used, whether letters, numbers, shorthand, Morse or other codes, Braille, musical notation, pictures, or diagrams.

To further determine the purpose and objective of the wording, the ECJ compared the wording of CN heading 4902 across all official EU languages, determining that only the German version refers specifically to “printed writings”, while all other language versions, including Spanish, Czech, Greek, English, French, Dutch, Finnish, and Swedish, use terms equivalent to “periodicals” or “printed publications.”

Courts Final Decision

Based on all the interpretations of the applicable rules and regulations, the ECJ ruled that CN heading 4902 must be interpreted to include paper-bound books that mainly contain printed Sudoku puzzles. This includes Sudoku puzzle books published every eight weeks, in which some numbers from 1 to 9 are pre-filled in a grid, and the remaining numbers must be entered in a specific order. Regarding the second question, the ECJ concluded that it need not be addressed.

Conclusion

The C‑375/24 illustrates how seemingly simple products can raise complex legal questions. Moreover, it highlights the importance of understanding not only the literal wording of tax laws but also their broader purpose, objectives, and multilingual context. 

For taxable persons, this case delivers a vital message: clarity in classification is essential to apply reduced VAT rates consistently. Therefore, before jumping to conclusions, taxable persons or their tax advisors should apply the ECJ's logic to determine whether the product is eligible for a reduced VAT rate.

Source: Case C‑375/24 - Keesing Deutschland GmbH v Tax Office for Corporate Bodies II, EU VAT Directive, Regulation - 2658/87 - Combined Nomenclature