The European Commission has ruled that the taxes levied by the French and Spanish government on telecom providers to support their respective public broadcasters are incompatible with EU law.
EU rules specify that any taxes levied on telcos must be directly linked to covering the costs of regulation of the telecom sector. France and Spain now have two months to propose measures that conform to EU rules. Their failure to do so could lead the Commission to decide to refer them to the European Court of Justice.
Spanish government officials said they were convinced that their model of financing public broadcaster RTVE was compatible with EU rules, according to local reports. The EC estimated that the countrys telecom tax would contribute Â230m this year to the broadcasterÂs coffers.
The EC estimated that FranceÂs 0.9% tax on the revenues of telecom operators would contribute about Â400m.Â