EC To Examine French Audiovisual Tax

by Ulrika Lomas, Tax-News.com, Brussels

20 November 2009

The French federation of telecom operators (la Fédération française des opérateurs des télécoms – FTT) has approached the European Commission to challenge the recent tax imposed by the government on the sector in order to finance public television.

Designed to finance the loss in revenue arising from the progressive ban on advertising on public television (France Télévisions), the new 0.9% tax levied on the turnover of operators, estimated at around EUR350m, is to be directly passed on to France Télévisions.

According to the FFT, the turnover tax will have a lasting and significant impact on the development of internet broadband in France.

The FTT is accusing the government of violating a European directive from 2002, prohibiting the financing of public television from the list of taxes that member states are able to impose on telephone operators.

A spokesperson from the European Commission confirmed that the complaint had indeed been received, and that the Commission was duly considering the matter.

Nevertheless, in June 2008, Viviane Reding from the Commission had already expressed doubts regarding the taxation of telecom operators and internet providers, emphasizing the fact such a move would prove damaging for future investment in these sectors.

The Commission has already begun a separate enquiry into the financing of France Télévisions, however, to determine whether the infamous tax respects European regulations pertaining to competition and state aid.

The FTT, which includes telephone operators and internet access providers, was created in September 2007 to represent the industry and to “defend its collective interests.”

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