New Scottish retail tax could contravene EU law
A proposed new tax law that is aimed at helping small retailers
in Scotland compete fairly against the big brands could be in
contravention of EU law.
The Large Retailers Levy would see raised business rates applied
to the top 0.1 per cent of the most expensive shop premises in
Scotland. Legal experts have warned, however, that it could be
perceived as favouritism by the Scottish government.
The EU takes a strict line on 'state aid' from governments, when
they perceive that one business or group of businesses has received
preferential treatment over their competitors. One legal expert has
said a single complaint by the retailer would trigger an EU
investigation, which could see them override the law and suspend
it.
The tax has garnered a number of derogatory names by critics,
who have labelled it the 'Tesco tax', due to the number of large
out-of-town supermarkets it will affect, or the 'Princes Street
penalty' referring to the high-end retail street in Edinburgh.
It is believed that House of Fraser, which owns the Jenners
department store in Princes Street has already threatened to go to
the European Courts if the plans for the new tax law go ahead.
A spokesman for the Scottish Government has said that such a law
would not have come as far as it has by now, if there was any doubt
over its legality.
"There is absolutely no question of the Scottish Government
proposing a policy that is anything other than robust, legal and
compliant with EU regulations," he said.