LONDON: Pay-TV companies including BSkyB and UPC are joining forces with set-top box manufacturers to oppose a European Commission ruling that could force them to pay taxes dating back three years on DVR devices imported into the EU.

Generic set-top boxes are classed as communications devices and exempt from import tax, but more sophisticated equipment with a hard drive or equivalent – such as Sky+ – have been re-categorised as recording devices, and are thus subject to a 13.9% levy.

It is estimated the change could cost BSkyB £15 million ($29.4m; €18.9m) per year, with back charges of £25 million upwards. A statement issued by the company said: "Like others in the industry we will consider an appeal.

"It is worth noting that a number of member states, including the UK, opposed the Commission's decision to reclassify." 

The US Trade Department has already begun a consultation process regarding the decision, and it is thought BSkyB and its allies may consider appealing to the European Court of Justice or the World Trade Organisation.

While BSkyB owns set-top box manufacturer Amstrad, it currently sources around 70% of its units from a variety of different companies, including the French-based Thomson and UK company Pace.

Data sourced from Financial Times Online; additional content by WARC staff