The Advocate General of the Court of Justice of the European Union (CJEU) found that the Polish retail tax does not infringe EU law in the field of state aid. Juliane Kokott's opinion may be taken into account in the Court's judgment in this case. Due to the Covid-19 pandemic, the tax on owners of large-format stores has been suspended until the end of 2020.
"Normal taxation cannot be derived from EU law. The starting point for determining what a given national legislature considers to be normal taxation may therefore only be a decision of this legislature each time. In the analyzed situations, it is a progressive income tax levied on enterprises operating in the retail sector or companies in the advertising publishing industry, the basis of which is turnover," the Court said.
According to Juliane Kokott, "a generally applicable tax law - which, as in this case, only sets the frame of reference - can therefore constitute aid only if it has been constructed in a clearly inconsistent manner". This is not the case as it is a progressive income tax.
On July 6, 2016, Poland passed the Retail Sales Tax Act, which entered into force on September 1, 2016. From that date, retailers had to pay on their monthly revenues from the sale of goods to consumers, if they exceeded PLN 17 million in tax in the amount of 0.8% in relation to the monthly income in the range from PLN 17 to 170 million and the tax of 1.4% in relation to the monthly income above PLN 170 million.
The Commission found this tax incompatible with the common market on the ground that it confers an unlawful advantage on "under-taxed" small businesses and therefore constitutes State aid. It took a similar decision for the Hungarian advertising tax for major companies. Poland and Hungary challenged the Commission's decisions before the EU Courts.