European tax rules threaten TV coverage of Athens Olympics

VAT refunds are guaranteed only to broadcasters that have a registered corporate entity in the EU.
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Television broadcasters in some countries outside the European Union (EU) say they may have to cut back their coverage of the Athens 2004 Olympic Games if the Greek government does not agree to provide refunds of Value Added Tax (VAT).

In previous years, host countries have refunded VAT paid on services and facilities connected with the production of Olympics coverage on the grounds that the broadcast signals were being “exported.”

However, Greece has still not confirmed commitments that it will refund VAT paid on transmission charges, and has so far refused to consider refunds on services such as hotel charges for the staff members working for broadcasters.

Despite the promotional benefits that Greece will receive overseas, VAT refunds are guaranteed only to broadcasters that have a registered corporate entity in the EU. This means that large broadcasting organizations in some of the wealthier countries outside of the EU will be able to claim refunds, but “poorer” broadcasters which do not have corporate entities in Europe will have to pay the tax.

David Astley, secretary-general of the Asia Pacific Broadcasting Union (ABU), said the soaring Euro and the refusal to refund VAT payments was unfairly impacting his members. The ABU represents more than 100 national broadcasters in 52 countries. It represents more than 25 Olympic territories, and its members have a combined viewership of 3.7 billion people.

“Collectively, our members are investing hundreds of millions of Euros to bring images of the Olympics, and the most famous of all host cities, to the biggest television audience in the world,” he said. “But most of our members do not have offices in Europe, so they will have to pay this extra tax, which will not be incurred by the wealthier broadcasters.”

Astley said it is probable that many Asian countries that will otherwise provide extensive transmissions of Athens and the Olympic events will have to cut back on their coverage to meet this added cost.

The Secretary-General of the North American Broadcasters Association, Michael McEwen, said the issue did not affect his members as they had corporate entities in Europe. “However, the VAT charges place an unfair burden on many of the world’s other broadcasters and may inhibit both the coverage and the quality of that coverage for national audiences," McEwen said. "The host country has a responsibility to recognize this and level the playing field for all rights holders in the fine tradition of the Olympic Spirit.”

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