Poland: EC finds retail sector tax contrary to EU rules

Poland: EC finds retail sector tax contrary to EU rules

The European Commission today announced that a Polish tax on the retail sector is in breach of EU state aid rules.

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As noted in today’s EC release, Poland’s progressive tax rates based on turnover give companies with low turnover an advantage over their competitors. The EC investigation did not show that with this progressive tax rate structure, smaller companies would either pay no retail tax at all or face a lower average tax rate than larger competitors. This would give companies with a lower turnover an unfair economic advantage. Smaller companies would pay less tax than their larger competitors in absolute terms, but still in the same proportion to their turnover.

Following a complaint, the EC opened an in-depth investigation in September 2016. Poland did not collect this new tax, and as a result, no state aid was effectively granted. Consequently, there is no need for recovery in this case.

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