France, Spain for court over telecom tax

The European Commission decided Monday to take France and Spain to court over their refusal to lift national taxes on telecom operators meant to makeup for revenue lost after the two governments passed laws prohibiting paid advertising on public TV.

By News Wires (text)

AFP - The European Commission decided Monday to take France and Spain to court for refusing to lift national taxes imposed on telecom operators after the governments banned paid advertising on public TV.

The European Union's executive arm said it was hauling the two countries before the European Court of Justice for imposing specific charges that are "in breach of EU law."

France and Spain imposed "telecom taxes" in 2009 to make up for revenue lost with the abolition of paid advertising on public television channels.

The Spanish government takes 0.9 percent of the gross revenues of telecom firms while the French government tax applies to 0.9 percent of total revenues exceeding 5.0 million euros ($7.0 million).

Annual revenue from the French charge, imposed in March 2009, is estimated at 400 million euros while the Spanish tax, created in September 2009, is estimated at 230 million euros.

The commission said EU telecoms rules state that charges can be levied "only to cover certain administrative and regulatory costs (mainly authorisations and regulatory functions) and should be objective, transparent and proportionate."

The EU executive had handed Paris and Madrid a final warning in late September, giving the governments two months to reverse course, but the commission noted that the offending taxes "are still in place."

Date created : 14/03/2011

Comments (2)

This is a very interesting

by Cheretta Hill (not verified) - 26/03/2011 - 18:46

This is a very interesting case. Both Spain and France seemed to have unfairly targeted telecoms with the abolishment of paid advertising on public television and with the imposing of a tax. This seems like a double blow to cripple the industry. The telecoms are losing out on revenue and have to pay additional taxes. If both countries aren't careful, they may bring this industry to fall. If this is in the laws of the European Union, then both countries should get rid of the tax without having to be forced to or sued. They joined the EU for the benefits, but they have to follow the rules as well.