French Mobile Operators To Be Charged New Turnover Tax

by Ulrika Lomas, Tax-News.com, Brussels

24 March 2004

The French government is to place a 1% tax on the revenues of the country's mobile telephone operators, it emerged last week.

The levy is due to come into force in 2006, and will remain in place for fifteen years. In addition, operators will have to pay more to renew their licences, which at present cost a EUR22 million flat fee. This is to be increased to a fee of EUR25 million.

Although the tax will mean that France’s largest operator, SFR (owned by Vodafone) will pay an additional EUR78 million in taxes, the firm has stated that it is “satisfied” with the government’s decision, as the industry had feared that the new tax could amount to as much as 5%.

However, this lower rate comes with strings attached for the firms. The French government has stated that its decision to limit the tax was based on the firms’ “planned investment programmes and expected (tariff) rate cuts."

The operators will also be expected to increase coverage to the so-called ‘white zones’ of the country, in which thousands of French communities don't have mobile phone coverage.

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