Euro Commission Seeks End to French, Spanish Telco Taxes

BRUSSELS: The European Commission has asked France and Spain to repeal the taxes on telecommunications companies, introduced to compensate for the loss in revenue from the removal of advertising on public broadcasters.

The Commission maintains that the taxes are incompatible with EU telecoms rules. France and Spain have two months to inform the Commission of measures taken to comply with EU telecoms rules. If they fail to do so, the Commission may refer them to the EU Court of Justice. The Commission notes that telecoms operators should only be charged administrative and regulatory costs and that these should be "objective, transparent and proportionate."

In France, telcos must pay 0.9 percent of subscriber revenues exceeding 5 million euros. This is expected to bring in 400 million euros a year. The Spanish tax is also 0.9 percent. Some operators have been exempted from the levy. It is expected to generate revenue of around 230 million euros this year.