EU probes Polish supermarket tax

© Andriy Popov – 123RF.com

Poland imposed a new tax in July that affects larger, foreign-owned supermarkets in an effort to finance social programmes and broaden popular support for the Law and Justice (PiS) government.

The new tax largely targets big groups such as France's Auchan and Carrefour and Germany's Lidl or Metro, sparing locally-owned retailers.

The European Commission, the EU's executive arm, "has concerns that the progressive rates based on turnover give companies with a low turnover a selective advantage over their competitors in breach of EU state aid rules," a statement said. It ordered the tax to be immediately suspended.

Brussels and conservative-led Poland have been caught up in bitter feud over a wave of populist reforms that the EU warns threaten democracy and the rule of law in the ex-communist EU and NATO state.