EU challenges Polish taxes on foreign winnings

The Polish government has been formally threatened with legal action by the
European Commission at the European Court of
(ECJ) because Poland-based winners of foreign lotteries are stung
for what Brussels regards as unfair taxes.

Currently, the cash prizes paid out by Polish lotteries are either subject to
a flat-rate tax of just 10% or exempted from tax altogether.

But anyone living in the country, which joined the EU in 2004, who strikes it
lucky in lotteries organised in other EU member states, such as the
Anglo-Franco-Spanish EuroMillions lottery, is subject to income tax rates that
start at 19% and go as high as 40%.

‘Member states are free to set their own rules on betting and gambling,’ said
EU tax and customs commissioner Lászl-Kovács. ‘But the EU treaty requires that
these rules are applied in the same way to domestic and foreign lotteries.’

Sending Warsaw a ‘reasoned opinion’ final legal warning, Kovács gave Poland
two months in which to set out how it was going to reform this discriminatory

If the country fails to do so, it may be referred to the ECJ, which has the
legal authority to order action.

The basis of Brussels’ stance is that Poland’s discriminatory lottery
taxation is an illegal restriction of the freedom to provide services across the
EU, as guaranteed by article 49 of the EU treaty.

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