EU takes France, Spain to court over telecoms tax

14th March 2011, Comments 0 comments

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."

© 2011 AFP

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