Polish Prime Minister Donald Tussk confirmed on Thursday that the government has taken steps to lower fuel prices in Poland, but the European Commission says reducing VAT on motor fuels is inconsistent with EU law — although it offered no comment specific to Tusk’s government’s proposal.
“We have no comments on these specific measures,” the European Commission wrote, as quoted by Do Rzeczy.
“I want to make it very clear that we have decided to take these actions fully consciously. The situation on the fuel market globally and in Poland will depend crucially on what happens in the war in the Middle East. Today at 6:00 p.m., the Polish government will make a comprehensive set of decisions at an extraordinary meeting to ensure that, in a situation beyond our control in Iran and the Middle East, we have maximum influence on everything possible, everything within our reach here in Poland, to ensure that fuel prices are as low as possible amidst the dramatic rise in global fuel prices,” Tusk had announced.
According to a statement by Louise Bogey, the European Commission’s spokesperson for tax affairs, sent to an RMF FM journalist, while a reduction in excise duty on fuels is permissible within certain limits, a reduction in the VAT rate on gas and diesel fuel is contrary to European Union law.
At the same time, Brussels assures that it recognizes the scale of the problem.
“We fully understand and sympathize with the need to support citizens in these difficult times,” the Commission said in its position paper.
The EU commission noted that it avoids directly “reviewing” the political promises of Polish decision-makers until the relevant regulations come into force.
However, the commission’s tax spokeswoman pointed out that the key problem is the so-called VAT Directive.
“Although the recent reform of these regulations gave member states flexibility, gas and diesel were excluded from these privileges,” according to RMF.
Bogey also noted that EU countries can currently apply reduced rates for the supply of electricity, natural gas and district heating, which is intended to help combat so-called energy poverty.
“The recent reform of rates introduced in the VAT Directive has provided member states with greater flexibility in applying reduced rates to certain goods listed in Annex III to the Directive, including the possibility of applying reduced VAT rates to the supply of electricity and natural gas starting from 5%. However, fossil fuels are not on this list,” said the European Commission’s spokesperson for tax affairs.
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