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France ‘may raise tax’ for telecom services
25 August 2010
Under European pressure, the French government is reported to be considering an increase in tax for triple play services
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France
France Telecom
tax
VAT
SFR
Iliad
Bouygues
Vivendi
The French government is weighing increasing value-added tax on “triple play” bundles of TV, phone and broadband, Reuters reports. The tax may rise to 19.6%. The current scheme taxes half the bundle, considered the TV portion, at a lower 5.5% rate.
France is considering raising VAT under pressure from European regulators, who see the current lower rate as being in breach of competition rules. On March 18, Brussels notified France that its system was not in keeping with the region’s rules on state aid and VAT.
The government may make a decision in the 2011 budget but no decisions have been made yet on how the tax would be reformed.
Telecom operators, such as France Telecom, Iliad, Bouygues Telecom and Vivendi’s SFR have opposed the tax rise. Some said they would be forced to increase prices charged to consumers as a result. GTB