EU’s Nowo decision gives national audiovisual taxes the thumbs up

Portuguese PayTV platform Nowo appears to be liable for €2.9 million in back taxes following a decision by the EU Court of Justice made at the end of last week.

The COJ ruled that an audiovisual tax, collected from Portuguese PayTV operators is not contrary to EU Law. As a result, Nowo is required to make overdue payments to Portuguese public body, the Institute of Cinema and Audiovisual (ICA).

Referring to the EU’s landmark TFEU Treaty, the COJ said its regulations do not “preclude national legislation which imposes a charge intended to finance the promotion and distribution of cinematographic and audiovisual works”.

The annual value of the tax is based on the number of existing subscriptions in the previous year. At present it is set at €3.50 per subscriber. Calculations by local media estimate that Nowo’s liability will run to just under €3 million in total.

Nowo is currently the fourth largest convergent operator in Portugal and was acquired by Vodafone earlier this year, in a deal expected to close in the first half of 2023. The company currently has around 250,000 mobile subscriptions and an additional 140,000 fixed access (PayTV and fixed broadband) accounts.

The decision should be the final say on a dispute that dates back to 2013. But as with all EU level rulings, the COJ’s judgement is not just of interest to Portugal, but any other territory that has a similar audiovisual tax or is considering introducing one.