CJEU Advocate General’s opinions, Polish tax on retail sector and Hungarian advertisement tax

CJEU Advocate General’s opinions

The Advocate General of the Court of Justice of the European Union (CJEU) today issued opinions in two cases concerning the Polish tax on the retail sector and the Hungarian advertisement tax. The opinions found that these taxes do not infringe EU state aid rules.


The cases are: Commission v. Poland (C-562-19 P) and Commission v. Hungary (C-596-19 P)


According to today’s release [PDF 256 KB] from the CJEU, Poland and Hungary introduced direct business taxes that are calculated based on turnover (rather than profit) and are based on a progressive rate structure. Such taxes primarily affect undertakings with a high turnover or large undertakings.

  • Poland in 2016 adopted a law on the tax on the retail sector, that requires retailers to pay tax on their monthly turnover from the sale of goods to consumers where turnover exceeds PLN 17 million (approximately €4 million), at the rate of 0.8% on turnover between PLN 17 million and 170 million and at the rate of 1.4% for the portion of monthly turnover above that.
  • Hungary in 2014 enacted an advertisement tax, requiring broadcasters or publishers of advertisements (newspapers, audiovisual media, billposters) to pay tax at a progressive rate on annual net turnover generated by the broadcasting or publication of advertisements in Hungary (six rates of tax between 0% and 50%). Those rates of tax were subsequently replaced by just two tax rates (0% for the portion of the taxable amount below HUF 100 million or approximately €312,000, and 5.3% for the portion of the taxable amount above that). For the first tax year, as a transitional measure, the law provided for the apportionment of any losses from the previous year.

The EC declared both taxes incompatible with the common market because they grant “smaller undertakings” that are “taxed at too low a level” an impermissible advantage and therefore constitute state aid. Poland and Hungary challenged the EC’s decisions before the General Court of the European Union. In 2019 judgments, the General Court annulled the EC’s determinations, finding no evidence in either tax regime of any selective advantage and therefore no state aid in favor of undertakings with lower turnover. The EC appealed to the CJEU.

Today, the Advocate General of the CJEU issued opinions proposing that the CJEU dismiss the appeals and uphold the General Court’s judgments.

The Advocate General’s opinions are not binding on the CJEU; rather, it is the role of the Advocate General to propose a legal solution to the cases. The CJEU judges are now beginning their deliberations in this case, with judgment to be given at a later date.

Read an October 2020 report [PDF 231 KB] prepared by the KPMG member firm in Poland

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