* Large majority votes for duty-free treatment of handsets
* EU Commission planned new duties on phones
* Industry pleased
(Adds quote, background)
By Tarmo Virki, European technology correspondent
TALLINN, July 1 The European Union decided on
Wednesday to halt a controversial plan to introduce new taxes
on cellphones, Sweden said.
The plan would have raised phone prices for consumers and
further squeezed already shrinking phone sales on the
Sweden, which holds the rotating presidency of the EU, said
a large majority of the countries voted for the duty-free
treatment of cellphones to continue in the Customs Code
In December, the EU Commission sent member states a formal
proposal to reclassify many phones as "multi-functional
devices," which would have triggered a 14 percent tax on phones
with TV receivers and 3.7 percent on navigation-enabled
Europe's top cellphone vendors, Finnish Nokia NOK1V.HE
and Swedish-Japanese Sony Ericsson (6758.T)(ERICb.ST), and the
Nordic countries strongly opposed the tax.
"We need more products and businesses free of tariffs, not
less, and therefore today's decision and the backing that was
achieved is a very positive signal," Swedish Trade Minister Ewa
Bjorling said in a statement.
Nokia and Sony Ericsson together make almost one of every
two phones sold in the world.
"Nokia is very pleased that the Commission is taking this
view and that the uncertainty surrounding the issue is now
being removed," said a spokesman for Nokia.
While GPS chips are currently used mostly in top-end
cellphones, Nokia and others are increasingly looking to use
them in mass-market phones.
For mobile TV, thus far launched in just a few countries,
an additional 14 percent tax would have been another major
While the mobile industry has grown faster in countries
with cheap labour there are still handset manufacturing plants
in the EU -- in countries like Finland, Britain, Hungary,
Romania and Estonia.
(Reporting by Tarmo Virki; Additional reporting by Niklas
Pollard in Stockholm and Bate Felix in Brussels; Editing by
Gary Hill, Leslie Gevirtz)