France to reduce iPod tax this week

France is expected to reduce its copyright tax imposed on music players containing flash memory, including the iPod nano and the iPod shuffle. The move may come as early as next week according to a source familiar with the plan. IDG News reports that the levy on a 4GB iPod nano could be reduced from over €50 (US$59) to about €8: "In France, as in some other European countries including Germany and Italy, it is legal to copy music for private use -- but in return the law imposes copyright levies on blank media, including cassettes, CDs, DVDs, hard disk drives and flash memory devices. The copyright levy is intended to compensate composers, performers and producers for revenue opportunities lost due to private copying of music."

The report says that in the case of the 4GB iPod nano, the French copyright levy adds nearly €52, or 16 percent of its €310 retail price and that proportionally, the copyright levy for music players with a hard disk drive is much lower--about €24 for the 60G-byte iPod.

"The 4G-byte iPod nano costs €60 more in France than it does just a few kilometers away over the German border, in part due to the copyright levy. Another factor is the difference in the rates of value-added tax (VAT), a form of sales tax, between the two countries: the rate is 19.6 percent in France, and 16 percent in Germany. One of the cheapest places to buy the 4G-byte iPod nano is Germany, where the €249.01 retail price includes a copyright levy of €2.74 and value-added tax (VAT) of €34.35."

Filed under: iPod, industry