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EC Approves French TV Tax

by Ulrika Lomas, Tax-News.com, Brussels

22 July 2010


The European Commission has approved the long-term funding mechanism for public television (France Télévisions), involving the introduction of two new taxes, one on advertisements and the other on electronic communications, as part of the gradual elimination of advertising on public channels.

The Commission concluded that the measure complies with the rules on state aid for public broadcasting services, particularly as regards mechanisms for preventing over-compensation for the costs of the public service mission.

Despite appeals by competitors, the advertising tax will be paid by the television channels, and the tax on electronic communications by service providers, such as Internet portals and cable or satellite operators. The revenue from these taxes will go to state funds, without being formally earmarked.

Commenting on this, Commission Vice-President for Competition Joaquín Almunia said: “State compensation of the costs of a public service mission is allowed, provided that the mission is clearly defined and there has been no over-compensation. I am satisfied that the French legislation includes the requisite mechanisms to preserve fair competition between the public and private sectors.”

The French authorities launched an overhaul of public broadcasting in 2008 aimed at sharpening its focus and raising standards, and resulting in the Law of March 5, 2009 on audiovisual communication and the new public broadcasting service, under which advertising on public channels will be reduced and ultimately abolished by end-2011.

TAGS: tax | business | European Commission | commerce | law | internet | e-commerce | legislation | France | Europe

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