St Pancras International station

France, in a move that many fear will reduce competition, plans to introduce a rolling stock tax.

The country’s draft 2010 finance bill includes a new tax on all passenger rolling stock and is expected will be voted through by the French parliament on December 23rd. This will be just a few days before the European market for international rail passenger services is opened for competition.

SNCF’s rivals say the new tax will add millions of pounds to their operation of cross-border rail services, but SNCF itself will not be so severely affected because the proposed tax will coincide with a partial repeal of an asset based tax that SNCF currently pay.

The tax will be payable regardless of the distance travelled or passengers carried in France and, as such, would make it very difficult for new operators to enter the rail market. In addition the proposed tax would impact on SNCF’s joint venture partners, including Eurostar, that will have to bear the cost of the new tax. Eurostar estimate that it will cost them an additional £5.5m.