The Commission could lodge infringement proceedings against Poland if it fails to withdraw the anti-inflation measures reducing VAT on gas and fertilisers as these are not in line with EU legislation, Polish media report.
The EU’s VAT directive allows a minimum 5% tax rate for natural gas, meaning zero VAT rates on fertilisers and gas, as opposed to basic products like food, are not compatible with EU legislation, the Commission said about measures in Poland’s “anti-inflation shield” adopted earlier this year.
Though it was already reported in January that the EU might reject the Polish anti-inflation shield, the Commission has now said it will launch an infringement procedure should Poland ignore Brussels’ call.
If the government’s explanation proves unsatisfying, the Commission may refer the matter to the EU Court of Justice, demanding changing provisions incompatible with EU tax law, it added.
EU Economy Commissioner Paolo Gentiloni “sent letters to Warsaw in September and October regarding the matter,” tweeted Dorota Bawołek, Brussels correspondent of Polsat News television, quoting an anonymous EU official.
Prime Minister Mateusz Morawiecki admitted that the Commission questioned some of Poland’s anti-inflation measures, announcing that the government will modify its programme to mitigate price rise.
The “shield” will be replaced with a different anti-inflation mechanism, Morawiecki said, adding that appropriate price policy by energy companies will be “a buffer” for consumers when the VAT rates return to their previous level.
However, Polish authorities will maintain zero tax rates for food “as long as the Commission does not object to it,” the prime minister insisted, as quoted by Business Insider.
The “anti-inflation shield” is in force in its current form until the end of 2022.
(Aleksandra Krzysztoszek | EURACTIV.pl)
Source: euractiv.com
