Judgment of the Court Grand Chamber of 16 March 2021, Commission v Poland, Case C-562/19 P

• Date: 16 March 2021
• Year: 2021

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Judgment of the Court (Grand Chamber) of 16 March 2021, Commission v Poland, Case

C-562/19 P

Link to the complete text of the judgment

Appeal – Article 107(1) TFEU – State aid – Polish tax on the retail sector – Article 108( 2) TFEU – Decision to

initiate the formal investigation procedure – Information used to determine the reference system –

Progressivity of rates – Existence of a selective advantage – Burden of proof

and

Judgment of the Court (Grand Chamber) of 16 March 2021, Commission v Hungary, Case

C-596/19 P

Link to the complete text of the judgment

Appeal – Article 107(1) TFEU – State aid – Hungarian tax on turno ver linked to advertisements –

Information use d to determine the reference system – Progressivity of tax rates – Transitional measure

for the partial deductibility of losses carried forward – Existence of a selective advantage – Burden of

proof

By a law which entered into force on 1 September 2016, Poland introduced a tax on the retail sector.

That tax was based on the monthly turnover of any retailer involved in the sale of goods to

consumers, provided that that turnover exceeded 17 million Polish zlotys (PLN) (approximately € four

million). That tax entailed two bands: a r ate of 0.8% applied to turnover between PLN 17 and 170

million and a rate of 1.4% was charged for the part of the turnover exceeding that amount.

Following the formal investigation procedure in respect of that measure initiated by decision of

19 September 2016,

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the European Commission considered, by decision of 30 June 2017,

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that that

progressive tax constituted State aid incompatible with the internal market and required Poland to

cancel all the payments suspended in respect of that tax, with effect from the date of adoption of that

decision.

By judgment of 16 May 2019,

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the General Court of the European Union, hearing a case brought by

Poland, annulled, first, the decision opening the formal investigation procedure and, second, the

negative decision concerning Poland. It held that the Commission was wrong to consider that the

establishment of a progressive tax on turnover generated by the retail sale of goods would lead to a

selective advantage in favour of undertakings with low turnover linked to that activity and that, as

regards the decision opening the formal investigation procedure, it was not entitled, on the basis of

the case file at the time of the adoption of that decision, to provisionally classify the tax measure at

issue as new aid without relying on the existence of legitimate doubts on that point.

For its part, Hungary had introduced, by a law that entered into force on 15 August 2014, a

progressive tax on revenue linked to the publication and broadcasting of advertisements in that

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Decision of 19 September 2016 on State aid SA.44351 (2016/C) (ex 2016/NN) – Polish tax on the retail sector – Invitation to submit comments

pursuant to Article 108(2) [TFEU] (OJ 2016 C 406, p. 76, ‘the decision op ening the formal investigation procedure’).

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Decision (EU) 2018/160 of 30 June 2017 on the State aid SA.44351 (2016/C) (ex 2016 /NN) implemented by Poland for the tax on the retail

sector (OJ 2018 L 29, p. 38, ‘the negative decision concerning Poland’).

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Judgment of the General Court of 16 May 2019, Poland v Commissio n, T-836/16 and T-624/17.