Swiss Court Postpones iPod Tax

by Ulrika Lomas, Tax-News.com, Brussels

24 February 2006

The Swiss judicial authorities have taken the decision to delay the introduction of a controversial tax on digital music playback devices, much to the relief of manufacturers of MP3 players, who have been lobbying for such an outcome.

The decision to introduce the new tariff for an authors' rights impost was taken by a federal arbitration commission on January 17. It would have come into effect on March 1.

However, the Swiss Federal Court has suspended the introduction of the tax following a legal appeal by a group of manufacturers and retailers under the banner of the Swiss Association for Information, Communications and Organization Technology (Swico), which include the likes of Apple, maker of the ubiquitous iPod.

Swico had requested a 60-day postponement to the introduction of the new law, under which a four-gigabyte MP3 player with flash memory would attract a tax of almost CHF19 (US$15), while a four-gigabyte player with a hard drive would incur a charge of just CHF2.

Audio and video recorders with a built-in hard drive would also be taxed; a 400-gigabyte DVD recorder would attract an extra charge of CHF138 under the new system.

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