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Telekom Austria Faces New Taxes in Croatia

Published: January 13, 2012; 12:28 · (Vindobona)

Croatia re-introduces extraordinary taxes for telecommunication operators. The local government is criticized by Telekom Austria and the EU.

Telekom Austria Faces New Taxes in Croatia / Picture: © Flickr

In 2009, the Croatian government levied an extraordinary tax for telecommunication service suppliers, which ended in 2011. Now, the local government decided to continue to withhold this special tax. As a result, telecommunication operators on the Croatian market will have to pay 6% taxes on their revenues until mid-2013. Besides Telekom Austria, the German Telekom and Croatian Telekom are concerned. With Vipnet and Tele 2, Telekom Austria has two Croatian subsidiaries.

The concerned telecommunication companies expressed their disappointment over the government´s decision. According to Vipnet, the re-introduction of the tax would send negative signals to other investors apart from the telecommunication industry. Besides that, the concept of the re-introduction would be completely unclear. The development of the whole Croatian telecommunication market would face a much slower development. In 2010, Vipnet´s extraordinary taxes reached € 15.2m.

Also the Commission of the EU criticized this step. According to the Croatian Prime Minister Zoran Milanovic, the tax also contains social aspects. Operators should be 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 Minister of Economics, Radimir Cacic expects a tax intake of € 39.8m. Cacic underlined 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.