Thursday, January 28, 2010

EC Takes Action against France over "Telecoms Tax"

The European Commission launched a legal action against France relating to the "telecoms tax" on telecommunications operators that was introduced in March 2009. To offset the ending of advertising on public TV channels, France has introduced a specific tax on the turnover of telecommunications operators in connection with their licence to provide telecoms services (including Internet and mobile phone services).

However, the Commission takes the view that in reality this tax constitutes an administrative charge that is incompatible with European law.

The EC estimates the annual revenue from the new tax is around 400 million euros. This tax is payable by telecommunications operators which, in accordance with the French Telecoms Law, provide a service in France.

"I have expressed doubts about the telecoms tax on a number of occasions" , said Viviane Reding, the Member of the European Commission responsible for the information society and media. "Not only does this new tax on operators seem incompatible with the European rules, it also concerns a sector that is now one of the major drivers of economic growth. Moreover, there is a serious risk that it will be passed on to customers at a time when we are in fact trying to reduce their bills by cutting termination rates and the costs of mobile phone calls, data transfer and text message roaming."