The European Commission has said Poland must end discriminatory taxation against foreign lottery winnings or face legal action.
Currently, winnings from lotteries in other member states are subject in Poland to higher taxation than winnings in domestic lotteries.
Poland exempts winnings from domestic lotteries or subjects them to a flat rate tax of 10 pct, whereas winnings from lotteries in other member states are taxed at the progressive income tax rates of 19 to 40 pct.
The commission has sent a "reasoned opinion" — the second stage of infringement proceedings — to the Polish government, giving it two months update the current taxation policy for lottery winners or it will refer the matter to the European Court of Justice.
"Member States are free to set their own rules on betting and gambling," said EU taxation and customs commissioner Laszlo Kovacs.
He added that the EU requires that these rules are applied in the same way to domestic and foreign lotteries.
Discriminatory taxation of foreign lottery winnings goes against EU law that ensures the freedom to provide services throughout each country of the 25-member bloc.
The Commission said it could take Poland before the European Court of Justice if it did not comply within the next two months.