Progressive turnover-based tax systems and EU state aid law: Case C-562/19 P Commission v. Poland and Case C-596/19 P Commission v. Hungary
| Author | Yasmine L. Bouzoraa,Justin Lindeboom |
| Date | 01 February 2022 |
| DOI | 10.1177/1023263X211061434 |
| Published date | 01 February 2022 |
| Subject Matter | Case Notes |
Progressive turnover-based tax
systems and EU state aid law:
Case C-562/19 P Commission
v. Poland and Case C-596/19 P
Commission v. Hungary
Yasmine L. Bouzoraa*
and Justin Lindeboom*
Abstract
In Commission v. Poland (C-562/19) and Commission v. Hungary (C-596/19) the Court of Justice of
the European Union ruled that progressive tax systems based on turnover do not by definition
provide selective advantages to undertakings with lower turnovers in violation of EU state aid
law. The European Commission had declared a Polish tax on retailers and a Hungarian tax on
advertisement incompatible with Article 107(1) TFEU because the progressive, turnover-based
taxes favoured undertakings with smaller turnovers over those with larger turnovers. The
General Court annulled both Commission decisions because such advantages were inherent to
the content and objectives of the general tax system, which was for Poland and Hungary to define.
The Court of Justice dismissed the appeals by the Commission, affirming that Member States are
free, in line with their fiscal autonomy, to opt for a progressive and/or turnover-based tax system.
While turnover-based corporate taxation may have market-distortive effects, the Court was right
to dismiss the Commission’s appeals. The principles of fiscal autonomy and legal certainty require
an assessment of selectivity in light of Member States’own definition of the content and objectives
of their tax systems.
Keywords
EU state aid law, progressive taxation, turnover-based taxation, selectivity, fiscal autonomy
*
Department of European and Economic Law, Faculty of Law, University of Groningen, Groningen, The Netherlands
Corresponding author:
Yasmine L. Bouzoraa, Department of European and Economic Law, Faculty of Law, University of Groningen, Oude Kijk in ‘t
Jatstraat 26, 9712 EK Groningen, The Netherlands.
E-mail: y.l.bouzoraa@rug.nl
Case Note
Maastricht Journal of European and
Comparative Law
2022, Vol. 29(1) 118–131
© The Author(s) 2021
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DOI: 10.1177/1023263X211061434
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