The European Commission opened a probe into Poland’s new tax on retailers that imposes a smaller levy on shops with lower sales.
The levy, which entered into force on Sept. 1, may breach state-aid rules because the progressive tax “has the effect that companies with low turnover either pay no retail tax or pay substantially lower average rates than companies with high turnover,” the EU’s executive said in a statement on Monday.
In January, the Commission started another investigation against Poland amid concerns the new government isn’t adhering to the bloc’s democratic standards.
The new retail levy was advocated by the new government as the tool to increase competitiveness of smaller and family-run retailers that lose market share to foreign-backed rivals, such as Portugal’s Jeronimo Martins SGPS SA’s Biedronka stores, Tesco Plc and Germany’s Schwarz Beteiligungs-GmbH’s Lidl shops.
The Finance Ministry, which forecast the tax to add 473 million zloty ($128 million) in budget revenue this year and 1.6 billion zloty next year, said it will respond to the EU’s investigation on Tuesday.
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