European Commission: "Polish turnover tax is unlawful"

The European Commission labeled a new Polish retail tax an illegal form of state aid. Trade organization EuroCommerce says it is happy with the European Commission’s decision.

Progressive tariffs

Poland created a new tax system for its retail industry last year: more turnover resulted in more taxes and companies with a monthly turnover below 17 million Polish zloty (about 4 million euro), were exempted. Between 17 and 170 million Polish zloty (4 to 40 million euro) resulted in a 0.8 % tax and companies that surpassed the 170 million zloty had to pay a 1.4 % tax

The European Commission investigated the system after a complaint was filed in September 2016 and deemed that progressive tariffs could be considered to be an illegal form of state aid as the legislation mainly benefited Polish companies. When the complaint was filed, the European Commission asked the Polish government to temporarily cancel the tax and now it will be discarded completely, with no taxes paid at all.  

EuroCommerce is happy with the European Commission’s decision: “The Polish tax was yet another example of a worrying trend among too many Member States towards a protectionist agenda. Particularly, but by no means exclusively in Central and Eastern Europe, we see measures being proposed that undermine the Single Market. Protectionism is not just a political act – it is a direct attack on consumers’ ability to choose what they want to buy, and almost inevitably leads to higher prices. Retailers and wholesalers live by offering that choice and promoting competitive prices”, Director-General Christian Verscheuren said.