Dyrektor Krajowej Informacji Skarbowej (Mode de gestion d'un OPC) (Free movement of capital – Undertakings for collective investment in transferable securities – Corporation tax - Judgment) [2025] EUECJ C-18/23 (27 February 2025)
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Dyrektor Krajowej Informacji Skarbowej (Mode de gestion d'un OPC) (Free movement of capital – Undertakings for collective investment in transferable securities – Corporation tax - Judgment) [2025] EUECJ C-18/23 (27 February 2025)
URL: http://www.bailii.org/eu/cases/EUECJ/2025/C1823.html Cite as:
[2025] EUECJ C-18/23,
EU:C:2025:119,
ECLI:EU:C:2025:119
( Reference for a preliminary ruling – Article 63(1) TFEU – Free movement of capital – Undertakings for collective investment in transferable securities – Corporation tax – Exemption from corporation tax for income received by such an undertaking – Conditions for exemption – External management of that undertaking – Directive 2009/65/EC – Article 29(1) – Applicability )
In Case C‑18/23,
REQUEST for a preliminary ruling under Article 267 TFEU from the Wojewódzki Sąd Administracyjny w Gliwicach (Regional Administrative Court, Gliwice, Poland), made by decision of 28 November 2022, received at the Court on 18 January 2023, in the proceedings
F S.A.
v
Dyrektor Krajowej Informacji Skarbowej,
THE COURT (First Chamber),
composed of T. von Danwitz, Vice-President of the Court, acting as President of the First Chamber, A. Arabadjiev and I. Ziemele (Rapporteur), Judges,
Advocate General: J. Kokott,
Registrar: M. Siekierzyńska, Administrator,
having regard to the written procedure and further to the hearing on 29 May 2024,
after considering the observations submitted on behalf of:
– F S.A., by Ł. Adamczyk, doradca podatkowy,
– the Polish Government, by B. Majczyna, R. Stańczyk and S. Żyrek, acting as Agents,
– the European Commission, by C. Auvret, U. Małecka, W. Roels and H. Tserepa-Lacombe, acting as Agents,
after hearing the Opinion of the Advocate General at the sitting on 11 July 2024,
gives the following
Judgment
1 This request for a preliminary ruling concerns the interpretation of Article 29(1) of Directive 2009/65/EC of the European Parliament and of the Council of 13 July 2009 on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities (UCITS) (OJ 2009 L 302, p. 32) and of Articles 18, 49 and 63 TFEU.
2 The request has been made in the context of proceedings between F S.A., a public company incorporated under Luxembourg law (‘F Fund’), and the Dyrektor Krajowej Informacji Skarbowej (Director of the National Treasury Information Bureau, Poland) (‘the tax authority’) concerning the taxation of investment income received by that company.
‘This Directive should not affect national rules on taxation, including arrangements that may be imposed by Member States to ensure compliance with those rules in their territory.’
‘1. This Directive applies to undertakings for collective investment in transferable securities (UCITS) established within the territories of the Member States.
2. For the purposes of this Directive, and subject to Article 3, UCITS means an undertaking:
(a) with the sole object of collective investment in transferable securities or in other liquid financial assets referred to in Article 50(1) of capital raised from the public and which operate on the principle of risk-spreading; and
(b) with units which are, at the request of holders, repurchased or redeemed, directly or indirectly, out of those undertakings’ assets. Action taken by a UCITS to ensure that the stock exchange value of its units does not significantly vary from their net asset value shall be regarded as equivalent to such repurchase or redemption.
Member States may allow UCITS to consist of several investment compartments.
3. The undertakings referred to in paragraph 2 may be constituted in accordance with contract law (as common funds managed by management companies), trust law (as unit trusts), or statute (as investment companies).
…
7. Without prejudice to this Chapter, a Member State may apply to UCITS established within its territory requirements which are stricter than or additional to those laid down in this Directive, provided that they are of general application and do not conflict with the provisions of this Directive.’
‘The following undertakings are not subject to this Directive:
(a) collective investment undertakings of the closed-ended type;
(b) collective investment undertakings which raise capital without promoting the sale of their units to the public within the [European] Community or any part of it;
…’
6 Article 6(1) and (2) of that directive provides:
‘1. Access to the business of management companies shall be subject to prior authorisation to be granted by the competent authorities of the management company’s home Member State. Authorisation granted under this Directive to a management company shall be valid for all Member States.
…
2. No management company shall engage in activities other than the management of UCITS authorised under this Directive, with the exception of the additional management of other collective investment undertakings which are not covered by this Directive and for which the management company is subject to prudential supervision but the units of which cannot be marketed in other Member States under this Directive.
The activity of management of UCITS shall include, for the purpose of this Directive, the functions referred to in Annex II.’
‘Without prejudice to other conditions of general application laid down by national law, the competent authorities of the investment company’s home Member State shall not grant authorisation to an investment company that has not designated a management company unless the investment company has a sufficient initial capital of at least EUR 300 000.
In addition, when an investment company has not designated a management company authorised pursuant to this Directive, the following conditions shall apply:
(a) the authorisation must not be granted unless the application for authorisation is accompanied by a programme of operations setting out, at least, the organisational structure of the investment company;
(b) the directors of the investment company must be of sufficiently good repute and be sufficiently experienced also in relation to the type of business pursued by the investment company and, to that end: the names of the directors and of every person succeeding them in office must be communicated forthwith to the competent authorities; the conduct of an investment company’s business must be decided by at least two persons meeting such conditions; and ‘directors’ shall mean those persons who, under the law or the instruments of incorporation, represent the investment company, or who effectively determine the policy of the company; and
(c) where close links exist between the investment company and other natural or legal persons, the competent authorities must grant authorisation only if those close links do not prevent the effective exercise of their supervisory functions.
The competent authorities of the investment company’s home Member State shall also refuse authorisation if the laws, regulations or administrative provisions of a third country governing one or more natural or legal persons with which the investment company has close links, or difficulties involved in their enforcement, prevent the effective exercise of their supervisory functions.
The competent authorities of the investment company’s home Member State shall require investment companies to provide them with the information they need.’
Polish law
The Law on Corporation Tax
8 Article 6 of the ustawa o podatku dochodowym od osób prawnych (Law on Corporation Tax) of 15 February 1992 (Dz. U. of 1992, item No 86), as amended by the ustawa – Przepisy wprowadzające ustawę o Krajowym Ośrodku Wsparcia Rolnictwa (Law implementing the Law on the national centre for agricultural assistance) of 10 February 2017 (Dz. U. of 2017, item No 614) (‘the Law on Corporation Tax’), provides:
‘1. The following shall be exempt from tax:
…
(10) open-ended investment funds and specialised open-ended investment funds established under the Law on Investment Funds, excluding specialised open-ended investment funds applying the investment rules and restrictions laid down for closed-ended investment funds;
(10a) undertakings for collective investment whose registered office is in a Member State of the European Union other than the Republic of Poland, or in another State in the European Economic Area, where those undertakings satisfy all of the following conditions:
(a) they are, in the State where they have their registered office, subject to income tax on their entire income, whatever the source of that income,
(b) the sole object of their business is the collective investment in transferable securities, money market instruments and other property rights of financial resources raised from the public by means of public invitation to purchase their investment securities,
(c) they operate under the authorisation of the competent financial market supervisory authorities of the State in which they have their registered office,
(d) their business is directly subject to the supervision of the competent financial market supervisory authorities of the State in which they have their registered office,
(e) they have appointed a depositary for the safe-keeping of their assets,
(f) they are managed by entities which have, to carry on their business, the authorisation of the competent financial market supervisory authorities of the State in which they have their registered office.
…
4. The exemption referred to in paragraph 1(10a) shall not apply to:
(1) collective investment undertakings:
(a) operating in the form of closed-ended collective investment undertakings or open-ended collective investment undertakings operating on the basis of the rules and investment restrictions specific to closed-ended collective investment undertakings, or
(b) whose investment securities, according to the instruments of incorporation, are not offered by way of a public offer, are not admitted to trading on a regulated market or by means of an alternative trading system and may be acquired by natural persons only if they acquire them in a single purchase for a value not less than EUR 40 000.
(58) the income (revenue) of undertakings for collective investment which have their registered office in a Member State of the European Union other than the Republic of Poland or in another country of the European Economic Area, as referred to in Article 6(4)(1), which satisfy the conditions referred to in Article 6(1)(10a)(a) and (d) to (f), excluding the revenue referred to in point 57(a) to (g)’.
The Law on Investment Funds
10 The ustawa o funduszach inwestycyjnych i zarządzaniu alternatywnymi funduszami inwestycyjnymi (Law on investment funds and the management of alternative investment fund), of 27 May 2004 (Dz. U. of 2004, item No 1546), in the version applicable to the dispute in the main proceedings (‘the Law on Investment Funds’), provides, in Article 1 thereof:
‘This law defines the rules applicable to the creation and operation of investment funds whose registered office is in the Republic of Poland, and the rules governing the conduct by foreign funds and management companies of their business in the Republic of Poland.’
‘This law also defines the operational rules for the managers of alternative investment funds whose registered office is in the territory of the Republic of Poland and the operational rules, in the territory of the Republic of Poland, for the managers of alternative investment funds whose registered office is in a Member State or in a third country.’
‘1. An investment fund is a legal person whose business has as its sole object the investment in transferable securities, money market instruments and other property rights, as defined by the law, of financial resources raised by means of invitation to purchase investment securities or investment certificates.
…
3. An investment fund shall carry on its business with particular regard to the interests of unit-holders, respecting the principles of mitigation of investment risks set out in the law.
4. An investment fund may operate as an:
(1) open-ended investment fund;
(2) alternative investment fund: a specialised open-ended investment fund or a closed-ended investment fund.’
‘1. The company shall create an investment fund, manage it and represent the fund in the relations with third parties.
1a. The company may, by means of an agreement concluded in writing, failing which it shall be null and void, delegate the management of an open-ended investment fund and the conduct of its business to a management company operating in the territory of the Republic of Poland.’
14 Article 14(1) of the Law on Investment Funds provides that an investment fund may be set up only by a company.
The dispute in the main proceedings and the question referred for a preliminary ruling
15 F Fund made a declaration to the tax authority that it was resident for tax purposes in Luxembourg and was fully liable to tax there.
16 According to its declarations, F Fund operates in accordance with Luxembourg law and, more specifically, with the loi relative aux fonds d’investissement spécialisés, du 13 février 2007 (Law on specialised investment funds of 13 February 2007) (Mémorial A 2007, p. 13), as a specialised investment fund. That fund states that it was authorised by the Commission de surveillance du secteur financier (Financial Sector Supervisory Commission, Luxembourg) (‘the CSSF’) and directly comes under the supervision of the CSSF, having been registered by the CSSF as a regulated investment fund.
17 In accordance with its articles of incorporation, approved by the CSSF, F Fund is managed internally by a board of directors, which has also been entered on the list of alternative investment fund managers maintained by the CSSF.
18 The sole object of F Fund is the collective investment of funds, raised in the context of a non-public offer to purchase shares of the fund, in transferable securities, money market instruments and other property rights.
19 In accordance with the authorisation of the CSSF, F Fund may invest in the shares of companies listed on the stock exchange, including the Giełda Papierów Wartościowych w Warszawie (Warsaw Stock Exchange, Poland), in bonds issued by capital companies, including by those capital companies which have their registered office in Poland, and in government bonds, including those issued by the Republic of Poland.
20 F Fund sent a request for a tax ruling to the tax authority in order to ascertain whether the income declared in respect of a future event received by F Fund qualifies for the exemption provided for in Article 17(1)(58) of the Law on Corporation Tax.
21 F Fund was of the opinion that that was the case. First, it met the requirements arising from Article 6(1)(10a)(a), (d) and (e) of that law. Secondly, as regards compliance with the requirements set out in Article 6(1)(10a)(f) of that law, namely the requirement that the investment fund must be managed by an entity which has, to carry on its business, the authorisation of the competent financial market supervisory authorities of the State in which it has its registered office, F Fund considers that an internally managed fund, as manager of an alternative investment fund, satisfies the conditions for benefiting from the exemption provided for in Article 17(1)(58) of that law.
22 In its tax ruling of 6 June 2022, the tax authority considered that, although F Fund satisfied the conditions set out in Article 6(1)(10a)(a) and (c) to (e) of the Law on Corporation Tax, it did not satisfy the condition set out in Article 6(1)(10a)(f) of that law, since it was not managed by an external entity.
23 F Fund brought an action before the Wojewódzki Sąd Administracyjny w Gliwicach (Regional Administrative Court, Gliwice, Poland), which is the referring court, in order to seek the annulment of that ruling.
24 That court states that the legislation at issue concerns the tax treatment of income deriving from investments made by collective investment undertakings. The dispute concerns whether a fund managed internally by its board of directors, which has been authorised by the competent authority of the Member State in which that fund has its registered office for that purpose, which is registered with that authority as an authorised manager of alternative investment funds and which appears on the list of managers maintained by that authority, satisfies the condition laid down in Article 6(1)(10a)(f) of the Law on Corporation Tax.
25 The purpose of introducing Article 6(1)(10a) into that law was to ensure equal treatment between Polish investment funds and investment funds whose registered office is in other Member States under the exemption from corporation tax provided in respect of investment funds. Moreover, following the introduction, then the amendment, of Article 6(1)(10a)(a) to (e) of that law, and the addition of a point (f) to that Article 6(1)(10a), the European Commission closed the infringement proceedings based on Articles 49 and 63 TFEU, brought against the Republic of Poland on the ground of alleged tax discrimination in respect of investment funds which have their registered office in Member States other than the Republic of Poland.
26 It follows from Article 4(1) and Article 14(1) of the Law on Investment Funds that, in the model adopted in Poland, investment funds are managed by a legal person separate from those investment funds, namely an investment fund company, and that they cannot be subject to internal management, such as, for example, that exercised by a board of directors. Furthermore, it follows from that law that only foreign collective investment undertakings that are externally managed can operate in Polish territory.
27 The referring court also states that the rule in Article 6(1)(10a)(f) of the Law on Corporation Tax, read in conjunction with Article 17(1)(58) of that law, introduces an objective criterion, resulting in the grant of an exemption from corporation tax only to non-resident collective investment undertakings managed by external entities authorised by the competent authorities and the exclusion from that exemption of internally managed funds.
28 First, it follows from Directive 2009/65, and in particular Articles 6 and 29 thereof and Annex II thereto, that that directive provides for the possibility, and not the obligation, to establish a management company and that the scope of the services provided by an external entity is similar to the scope of the services relating to the management of a collective investment undertaking by its board of directors. Secondly, those undertakings constituted in accordance with the requirements of that directive should be regarded as comparable.
29 Therefore, the question arises as to whether EU law precludes the national legislature, guided by the principle of comparability of domestic and foreign entities and for the purpose of mitigating the risk associated with investments, from introducing a formal condition, such as that resulting from Article 6(1)(10a)(f) of the Law on Corporation Tax, read in conjunction with Article 17(1)(58) of that law, according to which the benefit of the exemption from corporation tax is limited to an investment fund and a collective investment undertaking managed by an external entity.
30 In those circumstances the Wojewódzki Sąd Administracyjny w Gliwicach (Regional Administrative Court, Gliwice) decided to stay the proceedings and to refer the following question to the Court of Justice for a preliminary ruling:
‘Must the provisions of [Directive 2009/65], and in particular Article 29(1) thereof, in conjunction with Articles 18, 49 and 63 [TFEU], be interpreted [as] precluding the laying down in national legislation of formal requirements, such as in the main proceedings, for taking advantage of exemptions from corporation tax by undertakings for collective investment whose registered office is in a Member State of the European Union other than the Republic of Poland, or in another State in the European Economic Area, that is to say from the requirement that they be managed by persons who have, for the pursuit of their activity, the authorisation of the competent financial market supervisory authorities of the State in which the registered office of those undertakings is situated?’
Procedure before the Court
31 By decision of 21 November 2023, on a joint proposal from the Judge-Rapporteur and the Advocate General, the President of the Court of Justice sent the referring court questions concerning the Polish law applicable to the dispute in the main proceedings and certain statements of F Fund set out in the request for a preliminary ruling.
32 On 18 December 2023, the referring court sent its reply to the Court, from which it follows, first, that the Law on Investment Funds precludes the creation of an investment fund with an internal management form or a structure similar to F Fund at issue in the main proceedings, which has the legal form of an investment company with variable share capital, and that such a fund, unless it were operating with an external management form, would not be able to transfer its registered office to Poland.
33 Secondly, the condition concerning the obligation to entrust the management of an investment fund to another entity and not to natural persons, namely the condition concerning the external management of that fund, is intended to ensure the legal certainty of the business of that fund, as a collective investment undertaking separate from the particular interests of the individual participants in that fund. That condition is also intended to separate the assets of those participants from those of the management entity, which independently assumes responsibility for the management of the investment fund, with the result that the management company’s financial liability does not affect the assets of the fund itself.
34 Thirdly, the referring court also confirmed that the dispute at issue in the main proceedings concerned only the question whether F Fund had to satisfy the condition relating to management by an external entity laid down in Article 6(1)(10a)(f) of the Law on Corporation Tax.
Consideration of the question referred
35 As a preliminary point, it should be noted that, according to the Court’s settled case-law, in the procedure laid down by Article 267 TFEU, the functions of the Court of Justice and those of the referring court are clearly distinct, and it falls exclusively to the latter to interpret national legislation (judgment of 17 March 2022, Daimler, C‑232/20, EU:C:2022:196, paragraph 91 and the case-law cited).
36 Thus, it is not for the Court, in the context of a reference for a preliminary ruling, to rule on the interpretation of national provisions. The Court must take account, under the division of jurisdiction between the Courts of the European Union and the national courts, of the factual and legislative context, which the referring court is responsible for defining, in which the questions put to it are set (see, to that effect, judgments of 17 March 2022, Daimler, C‑232/20, EU:C:2022:196, paragraph 92 and the case-law cited, and of 9 November 2023, Keolis Agen, C‑271/22 to C‑275/22, EU:C:2023:834, paragraph 38).
37 In addition, the question whether or not the premisses relied on by the referring court in its question are incorrect is a question relating to the factual context, the accuracy of which is not a matter for the Court to determine (order of 6 September 2018, Gmalieva and Others, C‑79/17, EU:C:2018:687, paragraph 16 and the case-law cited).
38 In the present case, it is apparent from the request for a preliminary ruling that the referring court relies on the premiss that a collective investment undertaking, such as F Fund, is capable of benefiting from the exemption provided for in Article 17(1)(58) of the Law on Corporation Tax, subject to satisfying the condition laid down in Article 6(1)(10a)(f) of that law.
39 In addition, the referring court has stated that the act of laying down a condition relating to the external management of a collective investment undertaking is based on the fact that only such a management form is authorised for collective investment undertakings in Poland.
40 It must be held that, by its question, the referring court asks, in essence, whether Article 29(1) of Directive 2009/65, read in conjunction with Articles 18, 49 and 63 TFEU must be interpreted as precluding legislation of a Member State which provides that only a collective investment undertaking managed by an external entity which carries on its business on the basis of an authorisation issued by the competent financial market supervisory authorities of the State in which that entity has its registered office, may benefit from the exemption from corporation tax in respect of income derived from investments made by that undertaking, and which therefore does not grant such an exemption to internally managed collective investment undertakings constituted in accordance with the legislation of another Member State, where the law of the first Member State authorises only the creation of externally managed collective investment undertakings.
Consideration of the relevant provisions of EU law
41 Since the Polish Government and the Commission have expressed doubts as to the relevance of Directive 2009/65 to the resolution of the dispute in the main proceedings, it is necessary to ascertain, in the first place, whether that directive is applicable to that dispute.
42 In that regard, as is apparent, first of all, from Article 1(1) thereof, Directive 2009/65 applies to UCITS established within the territories of the Member States.
43 Next, in accordance with Article 1(2)(a) of that directive, UCITS, within the meaning of that directive, means an undertaking with the sole object of collective investment in transferable securities or in other liquid financial assets referred to in Article 50(1) of that directive of capital raised from the public and which operate on the principle of risk-spreading.
44 Lastly, as is apparent from Article 3(b) of Directive 2009/65, collective investment undertakings which raise capital without promoting the sale of their units to the public within the European Union or in any part of it are not subject to that directive.
45 It thus follows from Article 1(2)(a) and Article 3(b) of that directive that collective investment undertakings which raise capital without promoting the sale of their units to the public do not fall within the scope of that directive.
46 In the present case, it is apparent from the request for a preliminary ruling that the sole object of F Fund is the collective investment of funds, raised by means of a non-public offer to purchase shares of the fund, in transferable securities, money market instruments and other property rights.
47 The fact that, according to the statements of F Fund itself, set out in the request for a preliminary ruling, the raising of funds by that fund took place without promoting the sale of its units to the public means that the application of Directive 2009/65 to the situation at issue in the main proceedings is precluded.
48 In the second place, since the referring court alludes in its question to Articles 18, 49 and 63 TFEU, it is to be determined whether those provisions apply to that situation.
49 In that regard, it must be borne in mind that, in accordance with settled case-law, Article 18 TFEU, which enshrines the general principle of non-discrimination on grounds of nationality, is intended to apply independently only to situations governed by EU law in respect of which the FEU Treaty lays down no specific rules on non-discrimination (judgment of 18 June 2019, Austria v Germany, C‑591/17, EU:C:2019:504, paragraph 39 and the case-law cited).
50 In the field of freedom of establishment, the principle of the prohibition of discrimination is given specific expression in Article 49 TFEU (judgment of 3 March 2020, Tesco-Global Áruházak, C‑323/18, EU:C:2020:140, paragraph 55 and the case-law cited). In addition, Article 63 TFEU lays down a specific rule of non-discrimination in relation to the free movement of capital (judgment of 18 March 2021, Autoridade Tributária e Aduaneira (Tax on capital gains from property), C‑388/19, EU:C:2021:212, paragraph 21 and the case-law cited).
51 Furthermore, it is clear from settled case-law that, in order to determine whether national legislation comes within the scope of one or other of the fundamental freedoms guaranteed by the FEU Treaty, the purpose of the legislation concerned must be taken into consideration (judgment of 4 October 2024, Staatssecretaris van Financiën (Interest in respect of an intra-group loan), C‑585/22, EU:C:2024:822, paragraph 23 and the case-law cited).
52 Accordingly, national legislation intended to apply only to those interests which enable the holder to exert a definite influence on a company’s decisions and to determine its activities falls within the scope of Article 49 TFEU (judgment of 4 October 2024, Staatssecretaris van Financiën (Interest in respect of an intra-group loan), C‑585/22, EU:C:2024:822, paragraph 24 and the case-law cited).
53 On the other hand, national provisions which apply to shareholdings acquired solely with the intention of making a financial investment without any intention to influence the management and control of the undertaking must be examined exclusively in the light of the free movement of capital (judgment of 7 April 2022, Veronsaajien oikeudenvalvontayksikkö (Exemption of contractual investment funds), C‑342/20, EU:C:2022:276, paragraph 45 and the case-law cited).
54 In the present case, as is apparent from the request for a preliminary ruling, the dispute at issue in the main proceedings concerns the question whether F Fund may benefit from the exemption provided for in Article 17(1)(58) of the Law on Corporation Tax in respect of income it derives from its investments in the shares of companies listed on the Warsaw Stock Exchange, in bonds issued by capital companies which have their registered office in Poland and in bonds issued by the Polish State.
55 Although it does not exclude from its scope situations which make it possible to have a definite influence on a company’s decisions and to determine its activities, which brings those situations within the scope of the freedom of establishment, that legislation covers the tax treatment of income deriving from the collective investment of capital, without any intention to influence the management and control of the undertaking, within the meaning of the case-law cited in paragraph 53 above. That legislation is therefore liable predominantly to affect the free movement of capital. Any restrictions on freedom of establishment resulting from that legislation are an inevitable consequence of any restriction of the free movement of capital and do not, therefore, justify an independent examination of that legislation in the light of Article 49 TFEU (see, to that effect, judgment of 7 April 2022, Veronsaajien oikeudenvalvontayksikkö (Exemption of contractual investment funds), C‑342/20, EU:C:2022:276, paragraph 47 and the case-law cited).
56 In the light of the foregoing, the situation at issue in the main proceedings must be examined exclusively in the light of the Treaty provisions on the free movement of capital.
Whether there is a restriction on the free movement of capital
57 It follows from settled case-law that the measures prohibited by Article 63(1) TFEU, as restrictions on the movement of capital, include those that are such as to discourage non-residents from making investments in a Member State or to discourage that Member State’s residents from doing so in other States (judgment of 7 April 2022, Veronsaajien oikeudenvalvontayksikkö (Exemption of contractual investment funds), C‑342/20, EU:C:2022:276, paragraph 49 and the case-law cited).
58 Specifically, the less favourable treatment by a Member State of income paid to non-resident collective investment undertakings, compared with the treatment of income paid to resident collective investment undertakings, is liable to deter undertakings established in a State other than that Member State from pursuing investments in that same Member State and, consequently, amounts to a restriction of the free movement of capital, prohibited, in principle, under Article 63 TFEU (judgment of 7 April 2022, Veronsaajien oikeudenvalvontayksikkö (Exemption of contractual investment funds), C‑342/20, EU:C:2022:276, paragraph 50 and the case-law cited).
59 The exclusion of income received by a non-resident collective investment undertaking from the benefit of the exemption, unlike the income received by a resident collective investment undertaking, constitutes such less favourable treatment (see, to that effect, judgment of 7 April 2022, Veronsaajien oikeudenvalvontayksikkö (Exemption of contractual investment funds), C‑342/20, EU:C:2022:276, paragraph 51 and the case-law cited).
60 In the present case, it is apparent from the explanations provided by the referring court, first, that the income of investment funds whose registered office is in Poland benefits from the exemption from corporation tax.
61 Secondly, it is apparent from those explanations that Article 6(1)(10a) of the Law on Corporation Tax, which is applicable to collective investment undertakings whose registered office is in another Member State or in a State party to the Agreement on the European Economic Area of 2 May 1992 (OJ 1994 L 1, p. 3; ‘the EEA Agreement’), and which lays down the conditions for exemption from corporation tax to which Article 17(1)(58) of that law refers, was adopted for the purpose of ensuring equal treatment between those undertakings and the funds which have their registered office in Poland.
62 Thirdly, the referring court states that the Law on Investment Funds excludes in absolute terms the creation in Poland of an internally managed investment fund.
63 In accordance with Article 6(1)(10a)(f) of the Law on Corporation Tax, only undertakings for collective investment managed by entities which have, to carry on their business, the authorisation of the competent financial market supervisory authorities of the State in which they have their registered office may benefit from the exemption from that tax in respect of the income derived from their investment activities. According to the interpretation of that provision provided by the referring court, that condition requires a collective investment undertaking to be managed by an external entity for the purpose of benefiting from the exemption from that tax in respect of such income.
64 Such a condition therefore establishes a difference in treatment not on the basis of the State of residence of the collective investment undertaking, but on the basis of its management form.
65 In that regard, it must be borne in mind that national legislation which applies without distinction to resident and non-resident operators may constitute a restriction on the free movement of capital. It follows from the Court’s case-law that even a differentiation based on objective criteria may de facto place cross-border situations at a disadvantage (judgment of 7 April 2022, Veronsaajien oikeudenvalvontayksikkö (Exemption of contractual investment funds), C‑342/20, EU:C:2022:276, paragraph 54 and the case-law cited).
66 That is, inter alia, the case where national legislation which applies without distinction to resident and non-resident operators reserves a tax advantage in situations in which an operator complies with conditions or obligations which are, by their nature or in fact, specific to the national market, in such a way that only operators present on the national market are capable of complying with those conditions or obligations, and non-resident operators which are comparable do not generally comply with those conditions or obligations (judgment of 7 April 2022, Veronsaajien oikeudenvalvontayksikkö (Exemption of contractual investment funds), C‑342/20, EU:C:2022:276, paragraph 55 and the case-law cited).
67 The Court has thus held that, although the Member States are free to determine the legal form according to which funds may be created within their territory, since EU law has not been harmonised in that regard, the free movement of capital would be rendered ineffective if a non-resident collective investment undertaking, constituted according to the legal form authorised or required by the legislation of the Member State in which it is established and which operates in accordance with that legislation, were to be deprived of a tax advantage in another Member State in which it invests, on the sole ground that its legal form does not correspond to the legal form required for collective investment undertakings in that latter Member State (see, to that effect, judgment of 7 April 2022, Veronsaajien oikeudenvalvontayksikkö (Exemption of contractual investment funds), C‑342/20, EU:C:2022:276, paragraphs 57 and 61).
68 The Court has also held, as regards legislation of a Member State which granted a tax advantage only to closed-ended funds, that, since only real estate funds governed by the law of other Member States could be constituted in the form of open-ended investment funds and were, consequently, liable to be denied the benefit of the tax advantage conferred, the application of the distinguishing criterion based on the ‘open-ended’ or ‘closed-ended’ nature of investment funds led to real estate funds governed by the law of other Member States being disadvantaged, thereby creating a difference in treatment to their detriment (see, to that effect, judgment of 16 December 2021, UBS Real Estate, C‑478/19 and C‑479/19, EU:C:2021:1015, paragraph 42).
69 In the present case, as has been stated, in essence, in paragraph 62 above, investment funds may be constituted in Poland only if they opt for an external management form. Consequently, the inevitable and not uncertain consequence of a condition such as that laid down in Article 6(1)(10a)(f) of the Law on Corporation Tax is that only collective investment undertakings constituted in another Member State are likely to not satisfy the condition relating to the external management form and to not be eligible, therefore, for the exemption of their income (see, by analogy, judgment of 4 October 2024, Staatssecretaris van Financiën (Interest in respect of an intra-group loan), C‑585/22, EU:C:2024:822, paragraph 44 and the case-law cited).
70 It is true that, as stated in paragraph 67 above, since EU law is not harmonised in that regard, the Member States remain free to determine the management form applicable to the investment funds created within their territory (see, to that effect, judgment of 7 April 2022, Veronsaajien oikeudenvalvontayksikkö (Exemption of contractual investment funds), C‑342/20, EU:C:2022:276, paragraph 57).
71 Member States are also free to provide for, for the purposes of encouraging the use of collective investment undertakings, a specific tax regime applicable to those undertakings and to the dividends and other income received by them, and to define the material and formal conditions which must be respected in order to benefit from such a regime (judgment of 7 April 2022, Veronsaajien oikeudenvalvontayksikkö (Exemption of contractual investment funds), C‑342/20, EU:C:2022:276, paragraph 58 and the case-law cited).
72 However, where a Member State provides for a tax advantage in favour of certain collective investment undertakings, the conditions under which that advantage is granted must not constitute a restriction on the free movement of capital (judgment of 7 April 2022, Veronsaajien oikeudenvalvontayksikkö (Exemption of contractual investment funds), C‑342/20, EU:C:2022:276, paragraph 60 and the case-law cited).
73 Having regard to the case-law referred to in paragraph 67 above, the free movement of capital would be rendered ineffective if a non-resident collective investment undertaking, which adopted a management form authorised by the legislation of the Member State in which it is established and which operates in accordance with that legislation, were to be deprived of a tax advantage applicable to income derived from its investment in another Member State solely on the ground that its management form does not correspond to the management form required for collective investment undertakings established in that latter Member State.
74 Legislation which introduces such a condition is liable to deter non-resident collective investment undertakings from investing in shares of companies listed on the Warsaw Stock Exchange, in bonds issued by capital companies which have their registered office in Poland and in bonds issued by the Polish State, and is, therefore, a restriction on the free movement of capital prohibited, in principle, by Article 63(1) TFEU.
75 That being said, under Article 65(1)(a) TFEU, Article 63 TFEU is to be without prejudice to the right of Member States to apply the relevant provisions of their tax law which distinguish between taxpayers who are not in the same situation with regard to their place of residence or with regard to the place where their capital is invested.
76 It is apparent, however, from settled case-law that Article 65(1)(a) TFEU, in so far as it is a derogation from the fundamental principle of the free movement of capital, must be interpreted strictly. That provision cannot therefore be interpreted as meaning that all tax legislation which draws a distinction between taxpayers based on their place of residence or the State in which they invest their capital is automatically compatible with the Treaty (judgment of 7 April 2022, Veronsaajien oikeudenvalvontayksikkö (Exemption of contractual investment funds), C‑342/20, EU:C:2022:276, paragraph 67 and the case-law cited).
77 The differences in treatment permitted by Article 65(1)(a) TFEU must not constitute, according to Article 65(3) TFEU, a means of arbitrary discrimination or a disguised restriction. The Court has held, consequently, that such differences in treatment are permitted only when they concern situations which are not objectively comparable or, otherwise, when they are justified by an overriding reason in the public interest (judgment of 7 April 2022, Veronsaajien oikeudenvalvontayksikkö (Exemption of contractual investment funds), C‑342/20, EU:C:2022:276, paragraph 68 and the case-law cited).
Whether the situations are objectively comparable
78 It is apparent from the Court’s case-law that the comparability of a cross-border situation with an internal situation within a Member State must be examined having regard to the aim pursued by the national provisions at issue as well as to the purpose and content of those provisions (judgment of 7 April 2022, Veronsaajien oikeudenvalvontayksikkö (Exemption of contractual investment funds), C‑342/20, EU:C:2022:276, paragraph 69 and the case-law cited).
79 Moreover, only the relevant distinguishing criteria laid down by the legislation in question must be taken into account in determining whether the difference in treatment resulting from that legislation reflects an objective difference in situations (judgment of 7 April 2022, Veronsaajien oikeudenvalvontayksikkö (Exemption of contractual investment funds), C‑342/20, EU:C:2022:276, paragraph 70 and the case-law cited).
80 In that regard, it should be noted, in the first place, that, as is apparent from Article 17(1)(58) of the Law on Corporation Tax, which refers to the conditions laid down in Article 6(1)(10a)(a) and (d) to (f) of that law, the purpose of those provisions is to exempt from tax the income of collective investment undertakings whose registered office is in another Member State or in a State party to the EEA Agreement.
81 It follows that the exemption at issue concerns the income of undertakings which carry out specific activities, subject to, as is apparent, inter alia, from Article 6(1)(10a)(d) of the Law on Corporation Tax, the supervision of the competent financial market supervisory authorities of the State in which they have their registered office. That legislation is not intended to exempt the income of companies which carry out commercial activities that are not subject to that type of supervision.
82 In the second place, the referring court states that the objective of the condition relating to the external management of the collective investment undertaking laid down by the legislation at issue in the main proceedings is to mitigate the risk associated with the investment. Thus, according to the Polish Government, externally managed collective investment undertakings are not in the same situation as internally managed undertakings, having regard to the investment risk associated with the activities of collective investment undertakings. That government asserts that the objective of requiring external management is to limit that risk.
83 For the purpose of assessing whether the level of risk associated with the activities of those undertakings, according to their management form, reflects an objective difference to justify the tax exemption of only the income of undertakings which are managed by an external entity, it is necessary, however, to determine the objective of that exemption.
84 In that regard, although the referring court states, as indicated in paragraph 60 above, that the legislation providing for an exemption of the income received by a collective investment undertaking, from which F Fund wishes to benefit, is intended to ensure equal treatment between collective investment undertakings established in another Member State or in a State party to the EEA Agreement and funds which have their registered office in Poland, that court does not describe the objective pursued by the exemption from corporation tax granted to resident investment funds.
85 It is for the referring court, which has sole jurisdiction to interpret national law, taking account of all the elements of the tax legislation at issue in the main proceedings and the national tax system concerned as a whole, to determine the objective pursued by such an exemption (see, to that effect, judgments of 30 January 2020, Köln-Aktienfonds Deka, C‑156/17, EU:C:2020:51, paragraph 79, and of 16 December 2021, UBS Real Estate, C‑478/19 and C‑479/19, EU:C:2021:1015, paragraph 55).
86 It should nevertheless be stated in that regard that, although the referring court reaches the conclusion that that exemption is intended to avoid double taxation of income derived from investments, at the level of the investment vehicle and at the level of its unit-holders, and to treat investments carried out through a collective investment undertaking in the same way as direct investments for tax purposes, the fact that such an undertaking is managed by an internal entity does not necessarily place it in a different situation to that of a collective investment undertaking managed by an external entity. Such an objective may be achieved irrespective of the management form of the investment vehicle, since that objective depends on the tax regime applicable to the income received and distributed by such an undertaking, without the management form itself having any effect on the taxation of that income.
87 Consequently, although considerations relating to the different levels of risk associated with the activities of collective investment undertakings, based on the management form of those undertakings, show the reasons which may have led the national legislature to require resident investment funds to be constituted in accordance with the external management form, such considerations, with respect to the exemption from corporation tax laid down by the Law on Corporation Tax, are not capable of demonstrating differences in their situations which are relevant to collective investment undertakings with an external management form and those collective investment undertakings with an internal management form (see, by analogy, judgment of 7 April 2022, Veronsaajien oikeudenvalvontayksikkö (Exemption of contractual investment funds), C‑342/20, EU:C:2022:276, paragraph 76).
88 It must therefore be held that, in relation to national legislation intended to exempt the income of collective investment undertakings and treat investments made through such undertakings for tax purposes in the same way as investments made directly, a collective investment undertaking with an internal management form is not in a situation which is objectively different to that of a collective investment undertaking with an external management form.
89 In those circumstances, it is necessary to examine whether the restriction established by the national legislation at issue in the main proceedings may be justified by overriding reasons in the public interest.
Whether there is an overriding reason in the public interest
90 It should be noted that, according to the Court’s settled case-law, a restriction on the free movement of capital may be permitted if it is justified by overriding reasons relating to the public interest, is suitable for securing, in a consistent and systematic manner, the attainment of the objective which it pursues and does not go beyond what is necessary in order to attain that objective (judgment of 12 October 2023, BA (Inheritance – Public housing policy in the European Union), C‑670/21, EU:C:2023:763, paragraph 67 and the case-law cited).
91 In the present case, as has been stated in paragraph 82 above, it is apparent from the information provided by the referring court and the Polish Government that the condition relating to the external management form is intended to protect the interests of investors. That requirement thus seeks to separate the capital of investors grouped together in the investment fund from the assets of the management company and, by that means, to separate investment risks from those associated with the creation and the management of the investment fund.
92 In that regard, the Court of Justice has already ruled that the protection of investors is an objective of general interest pursued by the European Union (see, to that effect, judgment of 1 August 2022, HOLD Alapkezelő, C‑352/20, EU:C:2022:606, paragraph 80 and the case-law cited).
93 Accordingly, an objective of protecting investors may, in principle, constitute an overriding reason in the public interest, capable of justifying a restriction on the free movement of capital.
94 However, it is still necessary to ascertain, in accordance with the case-law referred to in paragraph 90 above, whether the restriction on the free movement of capital brought about by the national legislation at issue in the main proceedings is suitable for securing, in a consistent and systematic manner, the attainment of the objective which it pursues and does not go beyond what is necessary in order to attain that objective.
95 In that regard, it should be borne in mind that, for the purpose of benefiting from the exemption at issue in the main proceedings, a collective investment undertaking which has its registered office in another Member State or in a State party to the EEA Agreement must satisfy the conditions set out in Article 6(1)(10a)(a) and (d) to (f) of the Law on Corporation Tax.
96 As has been stated in paragraph 81 above, Article 6(1)(10a)(d) of that law provides that the activities of the funds must be directly subject to the supervision of the competent financial market supervisory authorities of the State in which they have their registered office.
97 Such a condition already makes it possible to ensure that the exemption is granted only to the income of undertakings which, in the State in which they have their registered office, are subject to the provisions guaranteeing the protection of investors in the form of the authorisation granted by those authorities and the supervision of those undertakings by those authorities.
98 Admittedly, it cannot be ruled out that a Member State may provide that, for the purpose of ensuring a level of investor protection which it considers adequate, only externally managed investment funds may be created within its territory.
99 The proportionality of provisions adopted by a Member State is not excluded merely because that Member State has chosen a system of protection different from that adopted by another Member State as those provisions need to be assessed solely in the light of the objectives pursued by the national authorities of the Member State concerned and of the level of protection which they seek to ensure (see, to that effect, judgment of 18 October 2012, X, C‑498/10, EU:C:2012:635, paragraph 37 and the case-law cited).
100 However, first, it appears, subject to the verifications which it is for the referring court to carry out, that the act of granting a tax exemption to the income of a collective investment undertaking which has its registered office in another Member State is without consequence as regards the legal forms of the funds which the latter State may authorise within its own territory and does not oblige that Member State to authorise the creation of internally managed investment funds.
101 In that regard, when questioned at the hearing, the Polish Government failed to explain how granting the exemption from corporation tax to a collective investment undertaking which has its registered office in another Member State, which is internally managed, would jeopardise the objective of protecting investors pursued by the national authorities.
102 Secondly, while it may be considered that more favourable tax treatment of the income of an externally managed collective investment undertaking would be likely to encourage investors to use such undertakings, it cannot be inferred, a contrario, that less favourable tax treatment, in the form of a refusal to exempt from corporation tax income received by an internally managed fund, makes it possible to protect investors against investments made in such funds.
103 Consequently, a tax measure designed to make less attractive investments made by a collective investment undertaking which has its registered office in another Member State and is subject in that Member State to the supervision of the competent financial market supervisory authorities, but internally managed, cannot be considered appropriate for attaining the intended objective of protecting investors.
104 In addition, at the hearing, the Polish Government argued that the legislation at issue in the main proceedings was also intended to prevent abuse.
105 However, since that government merely refers, without further clarification, to such a justification, without establishing a link between the management form of a collective investment undertaking and a possible risk of abuse, its argument cannot succeed.
106 In the light of all the foregoing considerations, the answer to the question referred is that Article 63(1) TFEU must be interpreted as precluding legislation of a Member State which provides that only a collective investment undertaking managed by an external entity which carries on its business on the basis of an authorisation issued by the competent financial market supervisory authorities of the State in which that entity has its registered office, may benefit from the exemption from corporation tax in respect of income derived from investments made by that undertaking, and which therefore does not grant such an exemption to internally managed collective investment undertakings constituted in accordance with the legislation of another Member State, where the law of the first Member State authorises only the creation of externally managed collective investment undertakings.
Costs
107 Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the referring court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable.
On those grounds, the Court (First Chamber) hereby rules:
Article 63(1) TFEU
must be interpreted as precluding legislation of a Member State which provides that only a collective investment undertaking managed by an external entity which carries on its business on the basis of an authorisation issued by the competent financial market supervisory authorities of the State in which that entity has its registered office, may benefit from the exemption from corporation tax in respect of income derived from investments made by that undertaking, and which therefore does not grant such an exemption to internally managed collective investment undertakings constituted in accordance with the legislation of another Member State, where the law of the first Member State authorises only the creation of externally managed collective investment undertakings.
