EU’s Court of Justice rules against EC in French telecoms tax dispute

28 Jun 2013

The Court of Justice of the European Union has ruled against the European Commission’s (EC’s) claim that the telecoms tax imposed on electronic operators in France constitutes an administrative charge that is incompatible with European law in Case C 485/11(Commission vs. France), according to the press release posted on the European Union’s official website. France and Spain imposed telecom taxes in 2009 to make up for the lost revenue when paid advertising on public television channels was abolished. French government tax applies to 0.9% of total revenues exceeding EUR5 million (USD6.53 million). According to the press release, the Court of Justice stated that ‘the charge at issue is not levied on all electronic communications operators holding a general authorisation or a right to use radio frequencies or numbers but only on operators holding a general authorisation who already provide their services on the electronic communications services market to end users. In those circumstances, the Court finds that the charge at issue does not constitute an administrative charge within the meaning of the Directive and does not therefore fall within its scope. Consequently, the Court dismisses the Commission’s action.’ In line with the court’s decision, the EC is liable to the incurred expenses throughout the legal proceedings.

As previously reported by TeleGeography’s CommsUpdate, in January 2010 the EC initiated infringement proceedings against the French government, after the French government imposed ‘telecoms tax’ on operators to offset the ending of advertising on public access TV channels. Viviane Reding, at the time the Member of the European Commission responsible for Information Society and Media, said: ‘I have expressed doubts about the ‘telecoms tax’ on a number of occasions … 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.’ Paris introduced the 0.9% sales tax in March 2009, covering audiovisual communication and the new public television service. The annual revenue from the tax for the Treasury is estimated at EUR400 million (USD560 million).