New Polish Retail Sales Tax is challenged by the European Commission

At least, Retail Sales Tax is challenged by the European Commission: last 19 September 2016 the EC announced an investigation of the new tax introduced in Poland.

30 September, 2016

As we announced last March and June, Poland introduced a new sales tax with different rates depending on the turnover of the business. These rates are disproportionally increased for retail sellers with a larger annual turnover. Small businesses are exempt from the new tax. The new tax only came into force last 1 September 2016, hence there are no tax payments made yet.

The Commission has now announced an investigation on the grounds of possible breach of EU state aid rules where small businesses have a competitive advantage against larger companies. The full press release with high-level information about the new tax and actions initiated by the Commission is available in the website of the European Union.

Since the sales tax is challenged, the future of the tax is uncertain. Most probably, the Polish government will have to suspend its application until the revision is over.

Update 30/06/2017: The Commission has already resolved the issue, rendering that the new law is breaching the EU rules. After establishing that the new law would unlawfully favour some companies over other (smaller companies would either pay a reduced amount or be totally exempt of the tax), the EC has not found any justification for such treatment.


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