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Croatia Abolishes Mobile Service Tax

Published: July 10, 2012; 15:51 · (Vindobona)

Today, the Croatian Parliament decided to abolishes the 6% mobile service tax. For Telekom Austria, this means a substantial relief.

Croatia Abolishes Mobile Service Tax / Picture: © Telekom Austria Group

Today, the Telekom Austria Group announces that the Croatian Parliament decided to abolish the 6% tax on mobile network service revenues as of 9 July 2012.

The tax was applicable on revenues generated by mobile services, such as voice, SMS and MMS, and was payable by the mobile operator.

In 2009, the Croatian government levied an extraordinary tax for telecommunication service suppliers, which ended in 2011. After it was abolished on 1 January 2012, the tax was reintroduced on 26 January 2012 for all mobile operators in Croatia.

The local government explained that telecommunication suppliers would have extraordinarily high roaming rates, which reach 300% of the rates of other EU countries. Besides that, the companies would be late in expanding their infrastructure.

Besides Telekom Austria, the German Telekom and Croatian Telekom were concerned. With Vipnet and Tele 2, Telekom Austria has two Croatian subsidiaries. In 2010, Vipnet´s extraordinary taxes reached € 15.2m.

In the past, the Commission of the EU criticized the taxes. According to the Croatian Prime Minister Zoran Milanovic, operators were motivated to invest in the expansion of the infrastructure and to reduce prices, which would be the highest ones in Europe anyway, Milanovic said. The Croatian government expected a tax intake of € 39.8m.