Request for a preliminary ruling from the Verwaltungsgerichtshof (Austria) lodged on 3 October 2023 – Finanzamt für Großbetriebe

(Case C-602/23, Finanzamt für Großbetriebe)

Language of the case: German

Referring court

Verwaltungsgerichtshof

Parties to the main proceedings

Appellant on a point of law: Finanzamt für Großbetriebe

Interested party: Franklin Mutual Series Funds – Franklin Mutual European Fund

Questions referred

Does a provision such as Paragraph 188 of the Investmentfondsgesetz 2011 (Law on Investment Funds 2011, ‘the InvFG 2011’), ¹ which has the effect of precluding foreign entities that are comparable to a domestic corporation from receiving a refund of income tax in Austria if they correspond in substance to a UCITS ² within the meaning of Directive 2009/65/EC, ³ and are therefore not permitted to operate as a corporation in Austria because only the legal form of a transparent special fund is provided for in respect of such entities in Austria, constitute a restriction on the free movement of capital within the meaning of Article 63 TFEU?

If that question is answered in the affirmative: is there an objectively comparable situation between, on the one hand, a domestic corporation that invests its assets in accordance with the principles of risk spreading, but does not constitute a UCITS due to the fact that funds are not raised from the public, and is thus permitted to operate as a corporation even in the domestic market and, on the other hand, a foreign investment fund company which would constitute a UCITS according to the domestic principles – on account of the fact that funds are raised from the public – and is therefore not permitted to operate as a corporation in the domestic market?

3.    If that question is answered in the affirmative: does preservation of the balanced allocation of the power to impose taxes constitute a ground of justification for a restriction on the free movement of capital in view of the fact that Paragraphs 186 and 188 of the InvFG 2011 seek to ensure that neither a domestic mutual fund nor a foreign mutual fund can produce a tax shielding effect vis-à-vis the unit-holders and that, consequently, relief from income tax is to be provided only at the level of the unit-holders in those cases in which Austria has waived its taxing right under the terms of a double taxation agreement?

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¹     Österreichisches Bundesgesetz über Investmentfonds (Austrian Law on Investment Funds) (BGBl. I No 77/2011 in the version published in BGBl. I No 111/2023).

¹     Undertaking for collective investment in transferable securities.

¹     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 (OJ 2009 L 302, p. 32).