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

AuthorYasmine L. Bouzoraa,Justin Lindeboom
DOI10.1177/1023263X211061434
Published date01 February 2022
Date01 February 2022
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 denition
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 dene.
The Court of Justice dismissed the appeals by the Commission, afrming that Member States are
free, in line with their scal 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 Commissions appeals. The principles of scal autonomy and legal certainty require
an assessment of selectivity in light of Member Statesown denition of the content and objectives
of their tax systems.
Keywords
EU state aid law, progressive taxation, turnover-based taxation, selectivity, scal 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) 118131
© The Author(s) 2021
Article reuse guidelines:
sagepub.com/journals-permissions
DOI: 10.1177/1023263X211061434
maastrichtjournal.sagepub.com

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