France Postpones Smartphone Tax, Cuts Movie Ticket Tax

One of the main budget proposals will be moved to 2015, while the ticket tax will come down to 5 percent starting next year.

PARIS – French phone and film fans are getting a bit of a reprieve, as the government announced it will postpone a new tax on Internet-connected devices and reduce the value added tax (VAT) on movie tickets.

The proposed tax would have applied to new purchases on tablets, smartphones, PCs and game consoles that can be used to access TV, music or movies with an added 1 percent fee at the point of purchase. That tax has been axed from the latest budget and pushed back to at least 2015. 

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In an interview published Friday morning in newspaper Le MondeAurelie Filippetti, France's minister of culture, announced several initiatives and said that the proposed tax -- which had garnered strong support from the government and President Francois Hollande in the spring -- had been scrapped in favor of giving consumers a little relief.

“The government has decided on a tax break,” she said.

That break will also extend to a cut in the movie ticket tax, reducing the VAT on cinema admission from 7 percent to 5 percent, starting in Jan. 2014. The reduction in ticket tax follows similar moves on books and live performances.

The connected device tax -- envisioned to be “painless” for consumers -- would add to the fund that compensates authors and artists for losses due to illegal downloading and compensate for a decline in revenue from an earlier tax on blank media such as CDs, which was enacted to discourage private copying.

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The new tax had been strongly opposed by manufacturers but supported by the Society of Dramatic Authors and Composers (SACD), who hoped the fund would contribute to additional funding for “cultural creation.”

It had been a main component of a report prepared by former Canal Plus CEO Pierre Lescure aimed at reforming the intricate and extensive cultural funding system here that supports filmmakers and authors through a series of taxes and grants. The report included 80 proposed reforms, including taxing ISPs and device manufacturers, two proposals that have not been decided on.

Lescure also recommended moving the authority of HADOPI -- the independent arm set up to combat Internet piracy and implement the controversial “three strikes” law that cuts off access to the Internet for convicted pirates -- to the Superior Audiovisual Council (CSA), the same body that regulates radio and TV throughout the country. That proposal is on the fast track, since the government dropped the “three strikes” law after declaring access to the Internet a basic human right back in July. The government is taking its focus off individual downloaders, instead refocusing its efforts on combating commercial piracy.