European Commission: Polish retail tax violates EU law

According to the European Commission ruling, Poland’s retail tax violates EU state aid ruled. “The Commission does not question Poland's right to decide on its taxation systems or on the objective of different taxes and levies. However, the tax system must comply with EU law, including state aid rules, and cannot unduly favor certain companies over others,” the EC statement said. According to the Commission, the retail tax’ progressive structure, favors smaller companies as they would either pay no retail tax at all or face a lower average tax rate than larger competitors. “Poland has not demonstrated that the progressivity of the retail tax was justified by the objective of the retail tax to raise revenues, or that companies subject to the higher rates would have a higher ability to pay,” the EC added. Poland approved the tax last year, but it never came into force, no repayment is necessary. The works on the tax have been suspended for months and the Finance Ministry said there are no plans to resume works on it at the moment.