German Tax Plans Incur Wrath Of PC Manufacturers

by Ulrika Lomas, Tax-News.com, Brussels

30 October 2003

According to a report by Dow Jones Newswires, computer hardware manufacturers Fujitsu Siemens and Hewlett Packard have filed a formal complaint with the European Union objecting to German taxes on personal computers and printers.

The issue concerns levies placed on computer equipment by Germany to compensate artists for illegal copying of music, and the manufacturers believe that the two ‘collecting societies’ VG Wort and VG Bild-Kunst, who are pushing for a 30 euro tax on PCs and up to 300 euros on printers, are abusing their monopoly in the process.

"A levy on computers is inadmissible because computers aren't devices intended for reproductions," stated the PC makers’ complaint according to a legal document seen by Dow Jones.

Germany has led the European campaign to tax hardware sales in order to recover 'lost' copyright revenues; In February 2003 the German Patent Office recommended that a levy of 12 euros should be imposed on the manufacture of PCs and in June, 2001, Hewlett Packard was ordered by a German court to pay a copyright levy on the sales of its CD burners over a three-year period.

The European Information and Communications Trade Association (EICTA), an IT and telecoms industry group whose members include Microsoft, Fujitsu, Alcatel, Nokia and Siemens, have previously warned the European Commission about the consequences of further extensions of the 'levying' principle. Said EICTA earlier this year: “the extension of copyright levies to digital devices and media is harmful to European consumers, creators and industry. Levies increase the price of products such as personal computers, consumer electronics devices and storage media which permit Europeans to be full participants in a dynamic information society.”

EICTA believes that technical protection measures and digital rights management systems are better ways of dealing with the problem of unlicensed copying.

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