WRITTEN QUESTION P-0822/04 by María Sornosa Martínez (PSE) to the Commission. Distortion of competition by Poland in respect of other EU products.
Date: 2004-03-08
Institutions: European Parliament, Provisional data
Subjects: Poland, VAT, accession to the European Union, application of EU law, citrus fruit, fiscal policy, protectionism, tax harmonisation, trade restriction

8.4.2004

EN

Official Journal of the European Union

C 88 E/521

Community legislation lays down that all food products qualify for the lowest rate of VAT, but that it is up
to each Member State to decide the rate it wishes to apply to these products.

However, the Polish bill severely distorts competition, by favouring certain products, most of them locally
produced, to the detriment of others mostly produced in other EU countries, such as citrus and other
imported fruit. The current situation, which directly affects Community citrus fruit growing already
discriminates against citrus fruit by applying a 7 % rate, as against the 3 % applied to other substitute
products; this is completely arbitrary, given the similarity of the cost of citrus fruit with these other, similar
products, which are not affected by the measure.

What measures is the Commission going to take in view of this possible tax discrimination by Poland
against imported citrus fruit coming from other Member States in favour of Polish domestic products of a
similar nature, with a view to safeguarding the principles of freedom of competition within the internal
market?

(2004/C 88 E/0534)

WRITTEN QUESTION P-0822/04

by María Sornosa Martínez (PSE) to the Commission

(8 March 2004)

Subject: Distortion of competition by Poland in respect of other EU products

I have obtained information indicating that the Polish Government plans to modify VAT so as to vary the
rate applicable to citrus fruits, raising it from the current 7 % to 22 %. This draft Polish legislation (draft
1874 of the bill in question), and specifically Article 36 thereof, will significantly increase consumer taxes
on citrus fruit and other imported products. This bill, which is awaiting ratification by the Polish Senate,
severely distorts competition by favouring local products to the detriment of products from the rest of the
Union, and specifically citrus fruit, which is already discriminated against, since citrus fruit coming from
other EU countries is currently taxed at 7 %, while other, similar local products are taxed at only 3 %.

Given Poland’s imminent accession to the EU how does the Commission intend to approach Poland with a
view to avoiding possible violation of Community competition law?

Joint answer
to Written Questions E-0715/04 and P-0822/04
given by Mr Bolkestein on behalf of the Commission

(5 April 2004)

According to Article 12 of the Sixth VAT Directive (1), Member States have to apply a standard rate not
lower than 15 % and may apply one or two reduced rates not lower than 5 %. In principle, those reduced
rates shall apply only to supplies of the categories of goods and services specified in Annex H of the
Directive. The first category in that Annex includes foodstuffs for human and animal consumption.

Poland has been authorized, under the Accession Treaty, to apply a super reduced rate of 3 % until
30 April 2008. Of course, Poland may apply this rate but always in conformity with Community law. In
particular, the principles underlying the VAT system and the provisions of the EC Treaty must be
respected.

The Commission has already received information according to which the draft Polish VAT Law provides
for a super reduced rate of 3 % (which will be raised up to 7 % by 30 April 2008) to be applied to fruit in
general, except for kiwis, papayas and other ‘Southern fruit’. These latter products, which include some
types of fruit which are not grown in Poland and which are imported into that country from some
Member States (in particular, citrus fruits), are to be subject to the standard rate of the tax (22 % in Poland,
according to the draft Law).

C 88 E/522

Official Journal of the European Union

EN

8.4.2004

Such a scheme could be in breach of Community law.

For that reason, the Commission has already sent a letter in this respect to the Polish authorities, stating
that:

(i) The scheme seems to run counter to Community law, and in particular to the principle of neutrality
which underlies the VAT system and to Article 90 of the EC Treaty, given its protective effect. Indeed,
according to this Article, no Member State may impose on products coming from other Member
States higher taxes than those imposed on similar or competing national products.

(ii) According to the information at the disposal of the Commission, the draft VAT Law is at an advanced
stage in the legislative process and, for that reason, the issue should be addressed as soon as possible.

(iii) The Commission remains at the disposal of the Polish authorities in case they would like to send

further information or in order to discuss the matter.

The Commission expects that the Polish authorities will adopt the necessary measures in order to ensure
that the draft VAT Law complies with the requirements of Community Law.

(1) Sixth Council Directive 77/388/EEC of 17 May 1977 on the harmonization of the laws of the Member States
relating to turnover taxes (cid:1) Common system of value added tax: uniform basis of assessment, OJ L 145,
13.6.1977, as last amended by Council Directive 2004/15/EC of 10 February 2004, OJ L 52, 21.2.2004.

(2004/C 88 E/0535)

WRITTEN QUESTION E-0725/04

by Daniela Raschhofer (NI) to the Commission

(11 March 2004)

Subject: Accession of Latvia

Latvia will join the EU on 1 May 2004. As the Commission is aware, the population of Latvia is made up
of several ethnic groups,
including Russians. The ‘acquis communautaire’, pursuant to which Latvian
legislation may not contain discriminatory provisions, will come into force in Latvia on its accession to the
EU.

Do national provisions still exist which discriminate against individual ethnic groups, for example

1.
with regard to freedom to travel?

2.

If so, what action is the Commission taking?

Answer given by Mr Verheugen on behalf of the Commission

(27 April 2004)

As the Commission spelled out in its Regular Reports on EU accession preparation, Latvia meets the
political criteria for EU accession, which includes the protection of minorities.

The 2003 Comprehensive Monitoring Report on Latvia (1) mentioned remaining restrictions concerning
citizenship and language requirements in the field of the four freedoms. The Commission underlined that
legislative requirements on language proficiency and their implementation must be in full respect of the
principles of justified interests, proportionality and non-discrimination and can only be applied in very
exceptional circumstances, on a case by case basis. Since then, and according to the follow-up monitoring,
Latvia has further amended its legislation, e.g. by eliminating restrictions regarding security services and
lawyers, in line with the ‘acquis’.

In the context of the anti-discrimination legislation, Latvia has addressed the remaining shortcomings in
this field, including further legislative alignment and the establishment of the Equality Body. Latvia has
committed itself to completing alignment on outstanding issues before accession.