Poland’s tax on retail sector, Hungary’s tax on advertisement (CJEU judgment)

Poland’s tax on retail sector

The Court of Justice of the European Union (CJEU) today upheld judgments of the EU General Court finding that a Polish tax on the retail sector and a Hungarian tax on advertisement do not infringe EU law on state aid.


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

Read today’s CJEU release [PDF 252 KB]

  • Poland in 2016 introduced a tax on the retail sector was based on the monthly turnover of any retailer from the sale of goods to consumers when turnover exceeds PLN 17 million (approximately €4 million). The rate of tax was 0.8% on turnover between PLN 17 million and 170 million and a rate of 1.4% for the portion of monthly turnover above PLN 170 million.
  • 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 (with 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 HUF 100 million). For the first tax year, as a transitional measure, the law provided for the apportionment of any losses from the previous year.

The European Commission determined both taxes were incompatible with the common market because they granted “smaller undertakings” that are “taxed at too low a level” an impermissible advantage and therefore constituted state aid. Poland and Hungary challenged the EC’s determinations 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. Read TaxNewsFlash

The EC appealed to the CJEU.

The CJEU today dismissed the EC’s appeals and issued judgments affirming the determination of the EU General Court. 

Read a March 2021 report [PDF 303 KB] prepared by the KPMG member firm in Poland

Read a March 2021 report prepared by KPMG’s EU Tax Centre

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