EU Commission asks Spain to drop Telecomms taxes

 

The EU has requested that Spain abolishes charges applied to the turnover of telecoms companies, which was introduced when the EU member states elected to end paid advertising on public TV channels.

The Commission ruled that such "telecoms taxes" are incompatible with EU telecoms rules, which states that any charges on telecoms operators should be related to covering the costs of regulating the telecoms sector.

Spain now have two months to inform the Commission of the measures taken to comply with EU telecoms rules. If they fail to do so, the Commission may refer them to the EU Court of Justice.

The Commission believe that Spain, who introduced the taxes as a means of compensating for the loss of revenue from TV advertising, are breaking EU telecoms rules. Under these rules charges can only be applied on telecoms operators to cover 'certain administrative and regulatory costs' and should be 'objective, transparent and proportionate'.

In particluar, a law on financing the Spanish public broadcaster RTVE began in September of last year, and imposed a charge of 0.9% on the gross revenues of telecoms operators to make up for the loss of revenue from paid advertising on Spanish TV. A small number of operators were exempted from paying this due to the fact that only broadcast in certain areas as opposed to nationally. The charge is expected to generate 230 million Euro in 2010 alone.

Back in July the Commission decided that Spain's new financing systems for national public television broadcasters were compatible with EU state aid rules because they did not give rise to disproportionate distortions of competition between public and private broadcasters as there would be no over-compensation for the costs of their public service missions. However, these state aid decisions were without prejudice to the compatibility of the charges on telecommunications companies with EU telecoms rules, and in particular the Authorisation Directive.