European Court of Justice Decision: Authorisation directive does not preclude public authorities to tax telecommunication towers

By Brent Springael


Exactly a year ago, the European Court of Justice ruled that public authorities can - indirectly - tax the economic activity of telecom operators without infringement of the Authorisation Directive (Directive 2002/20/EC of the European Parliament and of the Council of 7 March 2002 on the authorisation of electronic communications networks and services).

The tax was linked to the presence of an "establishment" through which a company conducts its business and, as such, the tax was not directly targeting telecom operators. As the masts and pylons were deemed to be such "establishments" through which telecom operators conduct their business, they were liable to this tax.

For earlier coverage, click here.

Since the main argument of the ECJ was to state that the tax was sufficiently broad and that it could theoretically target any business, it left an opening for arguing that a tax specifically on masts or pylons would be an issue. However, in a recent judgment (Case C-346/13 of 6 October 2015), the ECJ closed that door as well: even though the tax targeted the ownership of pylons or masts intended to support the antennas required for the functioning of the mobile telecommunication network, it does not infringe the Authorisation Directive. The tax in this case is imposed on any owner of transmission pylons or masts, whether or not it is the holder of an authorisation granted under the Authorisation Directive. Hence, the ECJ viewed this tax as not appearing to be linked to the general authorisation procedure entitling the undertakings to provide electronic communications networks or services. According to the ECJ, this tax is not specific enough for being considered as falling in the scope of the restriction.

With this approach, the Court went against the conclusion of the Advocate General and validated the restrictive approach of the ban of fees or taxes for rights of use and rights to install facilities related to electronic communications networks and services.