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 Bouzoraa*, Justin Lindeboom

*Corresponding author for this work

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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.
Original languageEnglish
Pages (from-to)118-131
Number of pages14
JournalMaastricht Journal of European and Comparative Law
Issue number1
Early online date23-Dec-2021
Publication statusPublished - 2022


  • EU state aid law
  • selectivity
  • fiscal autonomy
  • progressive taxation
  • turnover-based taxation
  • state aid
  • EU market
  • internal market

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