EU Commission Refers France And Spain To Court Over ‘Telecoms Taxes’

The European Commission decided Monday to refer France and Spain to the EU’s Court of Justice because they continue to impose specific charges on the turnover of telecoms operators in breach of EU law.

In both France and Spain, these charges were introduced when they decided to end paid advertising on public television.

The Commission considers the ‘telecoms taxes’ in France and Spain to be incompatible with EU telecoms rules, which require specific charges on telecoms operators to be directly related to covering the costs of regulating the telecoms sector. The Commission requested the French and Spanish authorities in October 2010 to put an end to these ‘telecoms taxes (IP/10/1211), but they are still in place. The Commission has also opened an infringement case against Hungary concerning another such ‘telecoms tax’ (see IP/11/308).

In the Commission’s view, the charges in France and Spain, which were introduced to compensate for the loss of revenue from paid advertising on public TV channels, are incompatible with EU telecoms rules. According to these rules, in particular Article 12 of the telecoms Authorisation Directive (2002/20/CE), charges can be levied on telecoms operators only to cover certain administrative and regulatory costs (mainly authorisations and regulatory functions) and should be objective, transparent and proportionate.

France

The French charge on telecoms operators was introduced in March 2009 after the decision was taken by the French Government to end paid advertising on public TV channels.

This charge is imposed on telecoms operators authorised to provide services in France. They pay 0.9% of their total revenues exceeding €5 million received from subscribers. The annual revenue from the new charge, which has been paid to the French Treasury, is estimated at €400 million. Operators that are subject to the tax having been paying it in monthly instalments since its introduction.

Spain

A law on financing the Spanish public broadcaster RTVE entered into force in September 2009 and imposed a charge of 0.9% on the gross revenues of telecoms operators to make up for the loss of revenue from paid advertising this broadcaster.

In October 2010, telecoms operators made the first payments to CMT, the national telecoms regulator. The charge was expected to generate revenue of around €230 million in 2010.

Background

On 20 July 2010, the Commission cleared the compatibility of the new financing systems for national public television broadcasters France Télévisions (IP/10/979) and for the Spanish broadcaster RTVE (IP/10/978) with state aid rules. These state aid decisions were without prejudice to the compatibility with other EU legislation, such as EU telecoms rules, and in particular the Authorisation Directive (2002/20/CE).

EU telecoms rules, in particular Article 12 of the Authorisation Directive (2002/20/CE), lay down precise provisions relating to the administrative charges that Member States can levy on operators authorised to provide telecoms services and networks. Charges on telecoms operators can only cover certain administrative and regulatory costs. At the same time, they should be objective, transparent and proportionate and should be adjusted if appropriate. Interested parties must also be consulted in an appropriate manner of any amendments to the charges.