EC Takes Issue with French Telecoms Tax

BRUSSELS: The European Commission is taking action against France for the tax on telecommunications operators that was instituted to offset the losses from the elimination of advertising on public TV.

The Commission says it has opened an infringement procedure against France for the tax being levied on telecommunications operators in connection with their licence to provide services—including Internet and mobile phone services. The annual revenue from the new tax for the Treasury is estimated at 400 million euros.

"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."

The French government has two months to reply to the letter of formal notice from the Commission. If the Commission receives no reply, or if the observations presented by the French Government are not satisfactory, the Commission can issue a reasoned opinion. Thereafter, if France still fails to fulfill its obligations under EU law, the Commission can refer the case to the European Court of Justice.