EU says no change in broadband bills
Broadband deals should not cost any more after VAT changes as ISPs did not pass on the reduced tax break to consumers
CONSUMERS should not have to pay any more because of VAT changes on all-inclusive internet, phone and TV packages, the EU says.
The commission has told France to change its VAT regime which allows two different rates of VAT on the so-called triple-play packages – one half at 5.5 per cent and the other at the regular 19.6 per cent. It says the law only allows a VAT reduction on the TV part of the package, and this does not amount to 50%.
However, EU tax spokesman Emer Traynor said this should not affect the consumer at all as French ISPs did not pass on the VAT reduction when it was first introduced.
In an interview with 20minutes.fr he said the EU started investigating the situation after a complaint from a French consumer that there had been no price reduction after the cut in VAT.
He said: “If consumers have not benefited from this reduction I cannot see why a rise in VAT should now have any effect on their bills.”
There had been claims of nearly 20 per cent rises and some ISPs, such as Iliad, which owns Alice and Free, said prices could go up from €30 to €35 by the end of this year.
Mr Traynor said the EU wanted to simplify the VAT system and especially to get rid of twin-tax regimes and would put forward proposals before the end of the year.
