Spanish Court Rules Digital Tax is Illegal

MADRID -- Spain’s National Court has ruled Spain’s so-called digital canon, designed to compensate authors for revenue lost from private copy, is illegal because of irregularities in the bureaucratic process.

The court did not rule whether the controversial tax instated in 2003 on all electronics and CD, DVD and MP3 sales was legal, only that the process for collecting and distributing the funds did not follow pre-establish processes.

The ruling comes shortly after the EU’s October ruling that Spain’s digital canon was “indiscriminately applied” thus illegal.

Spain’s Culture Minister, Angeles Gonzalez-Sinde, defended the digital tax.

“All it does is say that the 2008 order, which establishes the rates and the procedure for compensation, didn’t follow the proper legislative procedure and has deficiencies,” Gonzalez-Sinde said. “The ministry already has started working on this and the different sides have been meeting since January.”

Critics of the tax argue it is outdated, confuses the consumer, is unequally applied and encourages piracy.

Spain’s main opposition party has said it would eliminate the digital tax if elected.

“To remove the canon, first you would have to change the Intellectual Property Law, which we see more as a creative property norm. Present legislation is outdated because it was created for the context of the 1990s. There are other ways to compensate creators and we’ll go even further. We won’t just remove the indiscriminate application of the canon, but would change the overall management system of the authors’ rights,” the PP’s Jose Maria Lassalle told Spanish daily El Pais.