Selectivity of State Aid and Progressive Turnover Taxes – Leaving the Door (Too) Wide Open?: Commission V. Poland

Common Market Law Review 59: 187–202, 2022.

19 Pages Posted: 30 Aug 2022

See all articles by Maciej Bernatt

Maciej Bernatt

University of Warsaw, Faculty of Management

Łukasz Grzejdziak

University of Lodz - Faculty of Law and Administration

Date Written: February 1, 2022

Abstract

In case C-562/19, Commission v. Poland, the Court of Justice confirmed its settled case law that the EU rules on State aid apply to tax measures which have not been harmonized under EU law. The Court also reaffirmed that tax measures must be reviewed under Article 107(1) TFEU using the three-element selectivity test. The ruling, however, brought important new developments. The case annotation discusses the shortcomings of the Court’s approach to the selectivity test, in particular in relation to the finding that a progressive tax rate must be considered a part of the reference system. It also explains why turnover is not necessarily – contrary to the Court’s view – a neutral criterion. Finally, it explains why the ruling opens the door for Member States to introduce such turnover tax systems which are de facto selective and may aim at pushing an anti-EU, patriotic economic agenda.

Note: Reprinted from Common Market Law Review, Vol. 59, No. 1, February 2022, p. 187-202, with permission of Kluwer Law International.

Keywords: state aid, selectivity test, EU, Poland, Hungary, turnover taxes, economic patriotism, protectionism

JEL Classification: K21, K23, K34

Suggested Citation

Bernatt, Maciej and Grzejdziak, Łukasz, Selectivity of State Aid and Progressive Turnover Taxes – Leaving the Door (Too) Wide Open?: Commission V. Poland (February 1, 2022). Common Market Law Review 59: 187–202, 2022., Available at SSRN: https://ssrn.com/abstract=4199263

Maciej Bernatt (Contact Author)

University of Warsaw, Faculty of Management ( email )

Warsaw
Poland

HOME PAGE: http://www.wz.uw.edu.pl/en/pracownicy/lista/maciej-bernatt/cv

Łukasz Grzejdziak

University of Lodz - Faculty of Law and Administration

Narutowicza 65 str.
Lodz, 90-131
Poland

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