Brussels, 26 September 2013
Taxation: Commission refers Poland to Court over reduced VAT rate for medical and fire protection goods
The European Commission has decided to refer Poland to the EU Court of Justice for the illegal application of a reduced VAT rate to general medical equipment and pharmaceutical products. Under the EU VAT Directive, Member States are allowed to apply a reduced VAT rate for medical equipment and other appliances if they meet two conditions. They have to be intended to alleviate or treat disability and they have to be for the exclusive personal use of the disabled. Poland goes beyond this scope by granting a reduced VAT rate to medical equipment of general use such as for example equipment used in hospitals, and to certain non-medicinal pharmaceutical products such as disinfectants and spa products.
The Commission has also referred Poland to the EU Court for the illegal application of a reduced VAT rate to fire protection goods. Under EU VAT rules, a reduced VAT rate can only be applied to an exhaustively listed set of goods and services. The Directive does not allow Poland to apply a reduced VAT rate to fire protection goods, as such supplies are not included in that list. The Polish provision therefore goes beyond what is laid down in the VAT Directive. EU rules on VAT rates have to be strictly observed and interpreted as agreed and unanimously adopted by all EU Member States.
The Commission, as guardian of the treaties, requires Member States to respect the VAT rules they themselves unanimously approved, including Poland. The application of reduced rates outside of what is provided in the VAT Directive may create distortions of competition within the EU. EU legislation on reduced VAT rates must be interpreted strictly. This principle is established and has been confirmed by the Court many times and recently in a decision of the beginning of the year concerning medical equipment (see for example C-360/11)
Poland has disregarded the Commission's reasoned opinion from January 2013 (see MEMO/13/22) and continues to apply a reduced VAT rate to medical equipment of general use, and to certain non-medicinal pharmaceutical products, such as disinfectants and spa products. Poland has also disregarded the Commission`s reasoned opinion from February 2013 (see MEMO/13/22), maintaining the application of a reduced VAT rate to fire protection goods. Following Poland's failure to bring its legislation in line with EU VAT rules, the Commission has decided to refer Poland to the Court of Justice on both these cases.
For press releases on infringement cases in the taxation field see:
For the latest general information on infringement measures against Member States see:
On the September infringement package decisions: MEMO/13/820