EU defines high-end smartphones as eligible for high-end taxation

The European Commission is considering taxes on some mobile phones equipped with GPS and/or TV receivers. The idea is for fat-on-features handsets to be treated as multifunctional devices rather than mere phones, thus making them liable for import duties ranging from 3 to 14 percent.

For some twelve years the mobile phone industry had enjoyed zero import duties on all computer-related equipment thanks to the so-called Information Technology Agreement (ITA). Now the fate of printers, scanners, LCD screens and hard-drive set-top boxes, which are being taxed for some time, is now looming over mobile phones.

Due to the rapid technology development mobile phones are no longer mere call-and-text units and offer users features such as GPS and TV receivers or even QWERTY keyboards. These new features put the products into another category that should be taxed and the European Comission is reconsidering whether they should continue to go untaxed as regular mobile phones.

Suggested figures of the possible taxes vary from 14% import duty on mobileTV-enabled phones to 3.7% for GPS featured handsets. Future plans may even include slapping on QWERTY keyboards and high-end cameraphones.

Major players on the European GSM market, Nokia and Sony Ericsson, officially oppose the Commission's plans and rightfully fear customers pulling back.

Nothing is officially approved yet though. The first discussions are about to start next February. Decision will take at least six months to make.