At the press conference held on Tuesday, September 20th,
Poland's Minister of Finance, Mr. Paweł Szałamacha,
announced that the application of a retail sector tax will be
suspended following the European Commission's decision on
opening an in-depth investigation and issuance of an interim
injunction. The tax in question was adopted by Poland in July 2016
and entered into force on 1 September 2016. The first payments were
due in October 2016.
The Commission raised concerns that the progressive
turnover-based tax on the retail sector could give companies with a
low turnover a selective advantage over their competitors in breach
of the European Union state aid rules and issued an injunction
requiring Poland to suspend the tax until its assessment has been
Poland's retail tax
The newly introduced tax was to be applied on a monthly basis to
companies operating in Poland that are active in the retail sale of
goods. The tax base is turnover from retail sales. The progressive
tax rates are: 0.8% on the company's monthly turnover between
PLN 17 million and PLN 170 million, and 1.4% on turnover in excess
of PLN 170 million. Turnover below PLN 17 million is tax
This progressive rate structure could have, according to the
Commission, result in companies with a low turnover either paying
no retail tax or paying substantially lower average rates than
companies with a higher turnover. Pursuant to the Commission's
preliminary assessment, such differential treatment of retailers is
Commission's former decisions
In July 2016 the Commission issued a decision on a similar tax
introduced by Hungary, which was found to infringe the EU state aid
rules as it granted a selective advantage to companies with a low
turnover over their competitors. In Poland's case, the
Commission will now investigate further to determine whether its
initial concerns are confirmed. Although it is not yet determined
whether this tax will be deemed incompatible with EU laws, taking
into account the similarities between Poland and Hungary's tax
on the retail sector, it is highly probable that such
incompatibility will be found by the Commission.
Poland's further steps
Mr. Szałamacha stated at the press conference that the
Ministry of Finance will now commence work to prepare a new draft
of legislation introducing a tax on the retail sector based on a
different formula. The Ministry might return to the idea of linking
the taxation of retailers with the physical size of retail shops
rather than turnover. The new tax is planned to come into force on
1 January 2017. At the same time, the Minister announced that any
negative ruling of the Commission taken as to the existing law will
be appealed against.
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