ECLI:EU:C:2026:744

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OPINION OF ADVOCATE GENERAL

KOKOTT

of 10 September 2026 (1)

Case C‑475/25

Finanzamt für Großbetriebe

interested party:

P Privatstiftung

(Request for a preliminary ruling from the Verwaltungsgerichtshof (Supreme Administrative Court, Austria))

( Reference for a preliminary ruling – Free movement of capital – Taxation – Corporation tax – Private foundation under Austrian law – Deductibility, for corporation tax purposes, of transfers to beneficiaries who are themselves subject to capital gains tax in Austria – Non-deductibility, for corporation tax purposes, of transfers to beneficiaries who are not subject to capital gains tax in Austria – Double taxation convention between Switzerland and Austria )

I. Introduction

1. In the present case, the Court of Justice is called upon to address, once again, the tax treatment of private foundations in Austria. Approximately 11 years ago, in the judgment in F.E. Privatstiftung Eisenstadt, (2) the Court already addressed the rule laid down in the Austrian Körperschaftsteuergesetz (Law on corporation tax; ‘the KStG’), as then in force, and concluded that there had been an infringement of the free movement of capital (Article 63(1) of the Treaty on the Functioning of the European Union (TFEU), formerly Article 56(1) of the EC Treaty). The Austrian legislature reacted to that judgment in 2015, but even the new legislation does not appear to have settled the matter. Rather, the present dispute now hinges upon whether that new legislation is itself compatible with the free movement of capital.

2. In essence, the Court must assess whether Austria may apply a rule under which a private foundation is entitled to deduct from the taxable amount for corporation tax transfers it made to beneficiaries residing and subject to capital gains tax in Austria, but may not deduct transfers it made to beneficiaries who are resident abroad (in this case, Switzerland) and who are therefore not liable to pay capital gains tax in Austria. The effect of that rule, in terms of the private foundation’s own corporation tax liability, is that the private foundation as such generally bears a higher tax burden in the case of transfers to non-residents than it does in the case of transfers to residents. In considering that question, account must also be taken of a double taxation convention between Austria and Switzerland, under which the levying of income tax on such transfers to beneficiaries resident in Switzerland is exclusively a matter for Switzerland.

3. At first glance, the tax regime governing transfers made by private foundations to their beneficiaries appears to be a niche issue for those with a keen interest in specialist subjects. On closer inspection, however, the matter is closely linked to the taxation of dividends. The present case therefore has general significance, far beyond the specific circumstances of the case at hand, for the free movement of capital within the European internal market and for European tax law as a whole. The present case is also interesting because it examines the issue from the perspective of the foundation, as the entity distributing the profits, rather than, as is so often the case, from the perspective of the beneficiaries of the transfers or the recipients of dividends.

II. Legislative framework

European Union law

4. In the present case, the EU legal framework is defined by the provisions of the TFEU governing the free movement of capital, namely Article 63(1) and Article 65 TFEU.

Public international law

5. According to Article 21 of the Convention of 30 January 1974 between the Republic of Austria and the Swiss Confederation for the avoidance of double taxation with respect to taxes on income and capital (3) (Double Taxation Convention), the earnings of a person resident in a Contracting State that are not expressly referred to elsewhere in that convention may be taxed only in that State, that is to say, in that person’s State of residence.

National law

6. The legal institution of a private foundation was established in Austria by the Privatstiftungsgesetz (Law on private foundations) of 1993. (4) The taxation of transfers from private foundations to their beneficiaries is concerned, first, by the corporation tax to which those foundations themselves are subject, and, second, by the capital gains tax – as a form of income tax – to which, in particular, the resident beneficiaries of such foundations are normally subject as recipients of transfers from those foundations.

Corporation tax

7. In Austria, the Abgabenänderungsgesetz 2015 (Tax Amendment Law 2015; ‘the AbgÄG 2015’) (5) added new provisions on the taxation of private foundations to the Körperschaftsteuergesetz 1988 (Law on corporation tax 1988; ‘the KStG 1988’), with effect from 1 January 2016. Those new rules apply also to ongoing procedures relating to previous tax assessment periods. (6)

8. Paragraph 13(3) of the KStG 1988, as amended by the AbgÄG 2015, reads as follows:

‘In the case of private foundations …, the following shall not be taken into account either as earnings or as income, but shall be taxed separately in accordance with Paragraph 22(2):

1. earnings from capital assets in accordance with Paragraph 27 of [the EStG] 1988 …

…

2. earnings from private property sales in accordance with Paragraph 30 of [the EStG] 1988.

Total earnings under points 1 and 2 shall be reduced by total transfers within the meaning of Paragraph 27(5)(7) of [the EStG] 1988 made in the assessment period in so far as capital gains tax has been withheld from them and paid. If transfers are exempted from capital gains tax on the basis of a double taxation convention, total transfers shall be reduced in so far as capital gains tax has not been definitively levied on them. That shall also apply where the exemption is applied after capital gains tax has been paid; a subsequent exemption shall be regarded as an event having retroactive effect within the meaning of Paragraph 295a of the Bundesabgabenordnung [(Federal Tax Code)].

…’

9. Under Paragraph 22(2) of the KStG 1988, as amended by the AbgÄG 2015, the rate of corporation tax for a private foundation’s capital gains and earnings taxable under Paragraph 13(3) of the KStG 1988 is 25%.

10. Paragraph 24(5) of the KStG 1988, as amended by the AbgÄG 2015, reads as follows:

‘Corporation tax payable on capital gains and earnings within the meaning of Paragraph 13(3) … shall be credited by way of assessment in accordance with the following provisions:

1. Corporation tax shall be determined and paid on the submission of a tax return after an assessment of the taxable amount.

2. Private foundations shall make transfers within the meaning of Paragraph 27(5)(7) [of the EStG] 1988 in respect of which capital gains tax has been paid.

3. (a) The taxable amount for the credit shall be the difference between

– total earnings to be taxed separately under Paragraph 13(3) and

– total transfers within the meaning of Paragraph 27(5)(7) of [the EStG] 1988, if that total exceeds total earnings within the meaning of the first indent.

(b) If transfers are exempted from capital gains tax on the basis of a double taxation convention, total transfers shall be reduced in the determination of the taxable amount under letter (a) in so far as capital gains tax has not been definitively levied on them. That shall also apply where the exemption is applied after capital gains tax has been paid; a subsequent exemption shall be regarded as an event having retroactive effect within the meaning of Paragraph 295a of the Federal Tax Code.

4. Where corporation tax is credited for years prior to 2011, the credit shall amount to 12.5% of the taxable amount under point 3. Where corporation tax is credited for years from 2011, the credit shall amount to 25% of the taxable amount under point 3. Corporation tax for years prior to 2011 shall be credited as a matter of priority.

5. The private foundation shall maintain an account in which the corporation tax paid in each year, the amounts credited and the balance eligible for a tax credit shall be recorded on an ongoing basis.

6. In the event of the dissolution of the private foundation, the amount of the credit shall be determined in accordance with points 3 and 4. In calculating the credit pursuant to point 3, the balance remaining under point 5 shall also be treated as a transfer within the meaning of Paragraph 27(5)(7) of [the EStG] 1988. By way of derogation from point 3(b), notwithstanding payment of capital gains tax in the case of a possible subsequent exemption, the amount of the transfer shall be reduced accordingly. The credit shall be granted with the last assessment.

…’

Income tax, capital gains tax

11. Under Paragraph 27(5)(7), read in conjunction with Paragraph 27(2), of the Austrian EStG 1988, in the version applicable to the present case, earnings from the provision of capital, and thus earnings from capital assets include, inter alia, ‘transfers of any nature made by … private foundations’.

12. Paragraph 27a(1) of the EstG 1988, in the same version, provides as follows:

‘Earnings from capital assets shall be subject to a special rate of tax of 25% and shall not be taken into account in the calculation of the taxpayer’s income tax either in the total amount of earnings or in the income …, unless standard taxation … is applicable.’

13. It follows from Paragraph 93(2)(1), read in conjunction with Paragraph 97(1), of the EStG 1988, that a private foundation is to levy income tax on the transfers it makes in the form of capital gains tax by way of withholding tax, and hence that the tax liability of transfer recipients who are natural persons is thus definitively discharged (withholding tax). Pursuant to Paragraph 98(1)(5)(a) of the EStG 1988, the same applies in the case of limited tax liability.

III. Facts of the case and procedure in the main proceedings

14. P Privatstiftung is a private foundation under Austrian law with beneficiaries resident in Switzerland. In 2014, it generated earnings from capital assets – in particular, interest income and income from transfers of shareholdings and property sales – and made transfers to its beneficiaries in Switzerland. For the purposes of its corporation tax assessment, P Privatstiftung deducted those transfers from its taxable amount, thereby reducing its taxable earnings from capital assets by a corresponding amount. However, that was not recognised in the tax assessment notice issued by the Finanzamt für Großbetriebe (Tax Authority for Large Entities, Austria), as those transfers had been made to beneficiaries who were not subject to income tax in Austria and consequently also not subject to capital gains tax.

15. Following the action brought by P Privatstiftung, the Bundesfinanzgericht (Federal Finance Court, Austria), ruling at first instance, annulled the assessment notice. According to the Bundesfinanzgericht (Federal Finance Court), the penultimate sentence of Paragraph 13(3) of the KStG 1988, even as amended by the AbgÄG 2015, is contrary to EU law because it infringes the free movement of capital as interpreted by the Court of Justice in the judgment in F.E. Familienprivatstiftung Eisenstadt. (7)

16. The Verwaltungsgerichtshof (Supreme Administrative Court, Austria) is now hearing the case at second instance. In those proceedings, the tax authority essentially argues that there is no incompatibility with EU law because the new legislation adopted in Austria in 2015 does not place private foundations making transfers to beneficiaries who are resident abroad in a less favourable position than private foundations making transfers to resident beneficiaries. Furthermore, according to that authority, the taxation system has been modified to ensure the single taxation of the earnings of private foundations in Austria, as covered by Paragraph 13(3) of the KStG 1988, is effected consistently, irrespective of the residence of the foundation’s beneficiaries.

IV. The request for a preliminary ruling and the procedure before the Court

17. By order of 24 June 2025, received at the Court of Justice on 17 July 2025, the Verwaltungsgerichtshof (Supreme Administrative Court) stayed the proceedings and referred the following question to the Court of Justice for a preliminary ruling:

‘Does Article 63 TFEU preclude a tax regime of a Member State like that applicable in the main proceedings under which a resident private foundation is required to pay corporation tax on certain earnings (in particular interest income and income from transfers of shareholdings and property sales), but is reimbursed that corporation tax in so far as it makes transfers (gifts) to beneficiaries and those transfers are subject to domestic capital gains tax, with the result that reimbursement of that corporation tax is not made if the beneficiaries are not subject to capital gains tax on the transfers received (on the basis of a national exemption or a double taxation convention)?’

18. In the preliminary ruling proceedings before the Court, written observations have been submitted by P Privatstiftung, the Austrian Government and the European Commission.

V. Analysis

Preliminary remarks

19. By its question, the referring court is essentially seeking to ascertain whether Article 63 TFEU precludes a tax regime of a Member State under which a private foundation is permitted, for the purposes of its corporation tax assessment, to deduct from its taxable amount any transfers it has made to beneficiaries who are subject to capital gains tax in Austria, whereas no such deduction is possible where the foundation has made transfers to beneficiaries who are not themselves subject to capital gains tax in Austria. (8)

20. In that regard, despite the use of the terms ‘reimburse’ and ‘reimbursement’ in the question referred, the matter does not, so far as can be seen, concern an actual reimbursement or credit in respect of corporation tax already paid in a previous assessment period. That is because the transfers to the beneficiaries of the private foundation that are at issue in the main proceedings were, according to the referring court, made in the same year (2014) as that in which the foundation’s capital earnings were generated. (9)

21. It should also be emphasised that the present proceedings – just as in the case resulting in the judgment in F.E. Familienprivatstiftung Eisenstadt – do not concern the tax treatment of the beneficiaries of transfers from the private foundation (with respect to capital gains tax, for which the applicable rate was 25% during the period in question), but rather the tax treatment of the private foundation itself (with respect to the corporation tax payable by it, for which a tax rate of 25% also applied during the period in question). (10) However, as will be shown below, the situation of the beneficiaries of the transfers may be of indirect relevance, namely in the context of an overall evaluation of all the circumstances relevant to the assessment under EU law.

22. The question referred for a preliminary ruling must be assessed in the light of a national legal situation that has changed significantly, by comparison to the previous case of F.E. Familienprivatstiftung Eisenstadt, (11) following a legislative amendment adopted in 2015. According to the information provided by the referring court, that amendment applies also to the present case, even though the case still concerns earnings and transfers dating from 2014. In particular, following the amendment made to Paragraph 13(3) of the KStG 1988 by the AbgÄG 2015, the corporation tax at issue in the main proceedings, to which private foundations are subject, is no longer merely an ‘interim tax’; that is evident, above all, from the fact that corporation tax, once paid, is no longer automatically reimbursed upon the dissolution of a private foundation, as now follows from Paragraph 24(5)(6) of the KStG 1988, as amended by the AbgÄG 2015.

Application of the freedom of movement of capital

23. According to settled case-law, although direct taxation falls within their competence, Member States must exercise that competence consistently with EU law and particularly the fundamental freedoms guaranteed by the TFEU. (12) In accordance with Article 63(1) TFEU, those fundamental freedoms include the free movement of capital.

24. The TFEU contains no definition of the notion of capital movements. In general terms, any transfer of financial or real capital beyond the borders of a Member State which is not connected with the supply of goods or services and thus falling within the free movement of payments can be included as a capital movement. (13) Furthermore, the ‘Nomenclature of Capital Movements’ set out in Annex I to Directive 88/361, (14) notwithstanding the fact that it does not contain an exhaustive list of possible transactions, indisputably has an indicative value for the purposes of defining the concept of capital movements. (15) Gifts and endowments appear under heading XI, entitled ‘Personal capital movements’, of that nomenclature. (16)

25. Since the judgment in F.E. Familienprivatstiftung Eisenstadt, it has been accepted that transfers made by private foundations to their foreign beneficiaries are to be treated in the same way as the gifts referred to in the Nomenclature of Capital Movements, with the result that such transfers fall within the scope of the free movement of capital. (17)

Whether there is a restriction on the free movement of capital

26. According to the settled case-law of the Court, Article 63(1) TFEU lays down a general prohibition on restrictions on the movement of capital between Member States and between Member States and third countries. (18)

27. In the case leading to the judgment in F.E. Familienprivatstiftung Eisenstadt, (19) the precursor to the present case, the Court considered the existence of a restriction on the free movement of capital from the sole perspective of a person liable to pay corporation tax, that is to say, the private foundation concerned, and concluded that such a restriction did exist. That approach can be usefully applied to the present case also. More specifically, the dispute in the main proceedings concerns, once again, only the assessment of a private foundation for corporation tax and not the taxation of earnings generated from the capital assets of the beneficiaries of that foundation in the context of their personal income tax, or capital gains tax as a form of income tax.

28. It therefore follows that, from the perspective of the private foundation concerned, which is the taxpayer in the main proceedings, a provision such as Paragraph 13(3) of the KStG 1988, even in its revised version according to the AbgÄG 2015, continues to result in unequal treatment between, on the one hand, transfers made by that foundation to beneficiaries subject to capital gains tax in Austria and, on the other hand, transfers made by that foundation to beneficiaries not subject to capital gains tax in Austria, such as the beneficiaries resident in Switzerland who are concerned by the main proceedings. That is because the foundation may deduct its transfers to the former from the taxable amount for its corporation tax, but not its transfers to the latter. (20)

29. According to the judgment in F.E. Familienprivatstiftung Eisenstadt, that rule on deductibility of transfers from the taxable amount for corporation tax would result in a private foundation with beneficiaries in Austria having greater financial means than an otherwise comparable private foundation with beneficiaries abroad, which would give a private foundation with beneficiaries in Austria a cash-flow advantage over a private foundation with beneficiaries abroad; conversely, a private foundation with beneficiaries abroad would suffer a cash-flow disadvantage compared to a private foundation with beneficiaries in Austria. (21)

30. Furthermore, it follows from the reasoning set out in the judgment in F.E. Familienprivatstiftung Eisenstadt that the abovementioned rule on deductibility could – in the case of a private foundation having a ‘mixed’ group of beneficiaries, with some residing in the national territory and others residing abroad – create an incentive to make transfers – in so far as the foundation’s purpose so permits – to its beneficiaries residing in the national territory rather than to its beneficiaries resident abroad. That is because purely domestic transfers have more advantageous tax effects for the foundation concerned than cross-border transfers, since it is only domestic transfers that reduce the taxable amount for corporation tax and thus also the foundation’s corporation tax liability. (22)

31. Lastly, according to the reasoning set out in the judgment in F.E. Familienprivatstiftung Eisenstadt, a provision such as Paragraph 13(3) of the KStG 1988, even as amended by the AbgÄG 2015, makes it less advantageous from the outset to set up a private foundation with beneficiaries residing (also) abroad than to set up an equivalent foundation having only beneficiaries subject to capital gains tax in Austria. (23)

32. As in the case leading to the judgment in F.E. Familienprivatstiftung Eisenstadt, (24) all of the foregoing considerations can still militate in favour of a finding that there is a restriction on the free movement of capital. In a very similar vein, the Court has held that there is a restriction on the free movement of capital in relation to the taxation of dividends where dividends paid to recipients established abroad are treated less favourably than dividends paid to recipients established in the national territory, (25) and, likewise, where national measures are such as to discourage non-residents from making investments in a Member State or, conversely, to discourage residents of that Member State from making investments in other States. (26)

33. The fact, as emphasised by the referring court and the Austrian Government, that the corporation tax payable by the private foundation has, since the introduction of the new rule pursuant to the AbgÄG 2015, ceased to be a mere ‘interim tax’ of a provisional nature, but rather a final tax that is not automatically reimbursed, even in the event of the private foundation’s dissolution, does not lead to a different assessment. That is because, in the judgment in F.E. Familienprivatstiftung Eisenstadt, (27) the focus was essentially on the fact that, for a private foundation in particular, the deductibility from the taxable amount for corporation tax in cases involving transfers to beneficiaries who are as a rule resident in Austria and subject to Austrian capital gains tax is governed differently from cases where transfers are made to beneficiaries who are not subject to Austrian capital gains tax, as is the case with the beneficiaries concerned in the main proceedings, who are resident in Switzerland. The new legislation introduced by the AbgÄG 2015 has not substantially altered that situation.

34. Furthermore, the fact that Paragraph 13 of the KStG 1988, as amended by the AbgÄG 2015, does not refer to the domestic or foreign residence of the beneficiary of a transfer from a private foundation, but rather to whether the beneficiary is subject to capital gains tax in Austria, also does not suggest any other conclusion. It is not disputed that residents are generally subject to Austrian capital gains tax, whereas non-residents are not normally subject to that tax. (28)

35. The Austrian Government further maintains that the deductibility from the taxable amount for corporation tax can also be ruled out in the case of transfers from a private foundation to resident beneficiaries where those resident beneficiaries are not themselves subject to Austrian capital gains tax, as may be the case, for example, with not-for-profit organisations. According to the Austrian Government, the same logic therefore always applies, that is to say, no deductibility from the taxable amount for assessing corporation tax in the case of transfers to beneficiaries who are not subject to capital gains tax in Austria.

36. However, the Court already dealt with that objection in the case leading to the judgment in F.E. Familienprivatstiftung Eisenstadt and did not accept it as a cogent argument that could militate against a finding of a restriction on the free movement of capital. At that time, the Court based its decision on the fact that the non-deductibility from the taxable amount for corporation tax primarily concerned transfers to beneficiaries not resident in Austria, (29) or, in other words, that the contested corporation tax regime predominantly had an adverse effect on cross-border matters. In so far as can be seen from the case file, the new provision under Paragraph 13(3) of the KStG 1988, in the version pursuant to the AbgÄG 2015, has not substantially altered that situation.

37. Ultimately, the existence of a restriction on the free movement of capital could be ruled out only if one were to move beyond a simple consideration of the private foundation’s situation from the perspective of its own corporation tax liability and instead carry out an overall economic assessment, in which the tax situation of the private foundation’s transfers to its beneficiaries would have to be considered as a whole and a detailed examination should be made as to whether transfers to resident beneficiaries are in any way comparable to transfers made to beneficiaries resident abroad and whether they are treated equally in practice. Both the Austrian Government and the Commission adopted that approach in the present case, stating that, under the new rules introduced by the AbgÄG 2015, there is no longer any restriction on the free movement of capital, since a transfer from a private foundation is now only ever taxed once in Austria, regardless of whether the beneficiary of that transfer is, for its part, subject to income tax or capital gains tax in Austria or abroad.

38. I do not wish to conceal the fact that I have a certain sympathy for that view. However, it seems to me to be more consistent with the Court’s traditional approach, as set out in the judgment in F.E. Familienprivatstiftung Eisenstadt, (30) as well as in many other, more recent judgments addressing the free movement of capital, (31) to carry out such an overall assessment only at the next stage, that is to say, in the context of examining the justification for the established restriction on the free movement of capital (or, in the words of some more recent judgments of the Court, as part of assessing the ‘permissibility’ of such a restriction). (32)

39. By way of interim conclusion, it must therefore be stated – in view of the different treatment for corporation tax purposes of transfers from a private foundation to its beneficiaries, depending on whether or not those beneficiaries are, for their part, subject to capital gains tax in Austria – that a provision such as Paragraph 13(3) of the KStG 1988, as amended by the AbgÄG 2015, may be regarded as a restriction on the free movement of capital, which is prohibited under Article 63(1) TFEU, unless it is exceptionally justified (‘permissible’).

Justification (‘permissibility’) of the restriction on the free movement of capital

40. It now remains to be examined whether the restriction on the free movement of capital identified above can be justified, that is to say, whether it is ‘permitted’ or ‘permissible’ within the meaning of the Court’s more recent case-law. (33) At this juncture, as I have already stated, it is now necessary to perform an overall economic assessment of all the relevant circumstances surrounding the tax treatment of transfers made by Austrian private foundations to their beneficiaries, whether in Austria or abroad.

41. By virtue of Article 65(1)(a) TFEU, the provisions of Article 63 TFEU are without prejudice to the rights 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. Furthermore, as the Court has already recognised on several occasions, it is for each Member State to organise, in compliance with EU law, its system for taxing distributed profits. (34)

42. It therefore follows that a Member State may, in principle, apply a provision such as Paragraph 13(3) of the KStG 1988, as amended by the AbgÄG 2015, which permits private foundations to deduct from the taxable amount for corporation tax the transfers made by them only if the beneficiaries of those transfers are subject to capital gains tax in Austria, and thus as a rule excludes, in particular, the right to deduct in respect of transfers made to beneficiaries resident abroad. That is because such a provision introduces precisely what Article 65(1)(a) TFEU in principle permits, namely a corporation tax regime that varies according to the destination of the transfers made by the private foundation and the place where its beneficiaries are resident.

43. However, it is apparent from settled case-law that Article 65(1)(a) TFEU must, as a derogation from the fundamental principle of the free movement of capital, be interpreted strictly. That provision cannot therefore be understood 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 TFEU. (35)

44. The differences in treatment permitted by Article 65(1)(a) TFEU must not constitute, in accordance with 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’ (or ‘permissible’) only when they concern situations which are not objectively comparable or, otherwise, when they are justified by an overriding reason in the public interest. (36)

45. 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. (37) Moreover, only the relevant distinguishing criteria established by the legislation in question must be taken into account for the purpose of assessing whether the difference in treatment resulting from that legislation reflects a difference in objective situations. (38)

The objective of single taxation as a legitimate distinguishing criterion

46. As the referring court and, in particular, the Austrian Government have stated, Paragraph 13(3) of the KStG 1988, in its new version pursuant to the AbgÄG 2015, aims to ensure that all earnings from capital assets generated within Austria are ‘consistently’ subjected to taxation in Austria, once and with final effect. This may be described as the objective of ‘single taxation’. In conjunction with the provisions of the EStG (Paragraphs 27 and 27a of the EStG 1988), a provision such as Paragraph 13(3) of the KStG 1988, as amended by the AbgÄG 2015, also serves to prevent economic double taxation in Austria of income generated and distributed by private foundations. The aim is therefore neither to create a situation in which earnings from capital assets generated by private foundations are not taxed at all in Austria (‘no taxation’), nor to allow such earnings to be subject to economic double taxation in Austria.

47. I consider that objective of single taxation to be a legitimate purpose. It seems to me to be entirely in line with the Court’s case-law on the taxation of dividends, as initiated by the Grand Chamber, according to which no Member State would be obliged to waive its right to tax income generated through an economic activity undertaken on its territory. (39) Furthermore, the objective of single taxation is consistent with the intensifying discussions and efforts at the national, European and international level aimed at achieving fair taxation of all earnings and to counteract the erosion of the tax bases. Moreover, the abovementioned objective of single taxation is a key issue in the preliminary ruling proceedings currently pending in F Corporation. (40)

48. It is true that the Court has noted, in the judgment in F.E. Familienprivatstiftung Eisenstadt, (41) that the objective of single taxation has not yet been recognised in EU law as a distinct ground for justifying restrictions on the free movement of capital. However, it appears to me that that is not so much a categorical rejection of the fundamental principle of single taxation but rather a confirmation of settled case-law, according to which the mere concern regarding a reduction in tax revenue does not, in itself, justify a restriction on the fundamental freedoms of the internal market. (42) However, that is not at issue in the present case. The present case does not concern a restriction on the free movement of capital with the sole aim of preventing a reduction in tax revenue. Rather, the objective of single taxation here pursues a much broader and legitimate purpose of fair taxation, that is to say, to prevent certain earnings generated in Austria from escaping taxation altogether.

The lack of comparability between domestic and foreign circumstances

49. From the point of view of the abovementioned objective of single taxation, coupled with the objective of avoiding economic double taxation, an Austrian private foundation making transfers to beneficiaries resident in Austria and subject to Austrian capital gains tax is not in fact in the same position as an Austrian private foundation whose transfers are made to beneficiaries resident abroad. (43) The taxation mechanism differs fundamentally. This is because, in the former case, the private foundation withholds at source and pays Austrian capital gains tax at a rate of 25%, whereas in the latter case it normally does not. In the former case, in return for the withholding and payment of the capital gains tax, the private foundation is not required to pay corporation tax at a rate of 25% on the equivalent value of the transfers made, whereas in the latter case, in which it has not withheld and paid capital gains tax, it is required to do so; that is the only means of achieving single taxation in Austria, as intended by the national legislature, whilst at the same time avoiding economic double taxation in Austria.

50. Ultimately, the present factual situation does not differ significantly from that arising in cases concerning dividend distributions, in respect of which the Court has already held that, in the context of measures laid down by a Member State in order to prevent or mitigate the imposition of a series of charges to tax on, or the economic double taxation of, profits distributed by a resident company, non-resident recipients of dividends are not necessarily in a situation that is comparable to that of resident recipients of dividends. (44) The Court has also adopted a similar reasoning in other contexts relevant to tax law. (45)

51. Since an Austrian private foundation will not be in the same situation as regards the objective of single taxation, depending on whether it makes transfers to resident beneficiaries subject to Austrian capital gains tax or to beneficiaries resident abroad who, for their part, are not subject to Austrian capital gains tax, Article 65(1)(a) TFEU, read in conjunction with Article 65(3) TFEU, permits those two situations to be treated differently for the purposes of corporation tax.

The Austria-Switzerland Double Taxation Convention

52. Lastly, it remains to be examined how the Austria-Switzerland Double Taxation Convention affects the assessment, with respect to EU law, of the present case.

53. Where, as in the present case, a double taxation convention has been presented by the national court as forming part of the legal background to the main proceedings, the Court must take that convention into account – even if it does not, as such, form part of EU law – in order to give an interpretation of EU law that is relevant to the national court. (46)

54. It is apparent from Article 21 of the double taxation convention in question that the earnings of a person resident in Switzerland arising from transfers made by an Austrian private foundation may be taxed only in Switzerland. In the judgment in F.E. Familienprivatstiftung Eisenstadt, the Court regarded a similar rule contained in comparable double taxation conventions between Austria and other States as a renunciation by Austria of its right to exercise its powers of taxation over transfers from private foundations to beneficiaries resident abroad. (47)

55. In my view, however, it may be useful to clarify and refine that conclusion. Subject to closer examination by the referring court, it appears to me that Austria, in such double taxation conventions, and in particular in its convention with Switzerland, which applies in the present case, has merely renounced the right to tax the beneficiaries of transfers from private foundations as part of their personal income tax liability, but not the right to tax the private foundation itself, as the distributing entity, in the context of its corporation tax liability.

56. It is certainly true that Austria creates the risk of economic double taxation by taxing transfers made by private foundations to beneficiaries resident in Switzerland as part of the corporation tax liability of the foundation concerned, while being fully aware that the relevant double taxation convention confers upon Switzerland the right to tax the same transfers as part of the beneficiaries’ income tax liability.

57. That is consistent with the case-law on the taxation of dividends, which states that the Member State in which a company distributing dividends is resident must ensure that non-resident recipients of such dividends are subject to the same tax treatment as resident dividend recipients. (48) In applying that approach to the situation where transfers are made by private foundations to their beneficiaries, care must also be taken in those cases to ensure that resident and non-resident beneficiaries are subject to the same tax treatment (but not necessarily identical tax treatment).

58. According to the explanations provided by both the referring court and the Austrian Government, Austria has complied with precisely that obligation under EU law by taking into account, when assessing a private foundation’s liability for corporation tax, whether and to what extent a transfer made by that foundation to a beneficiary resident abroad was exempt from capital gains tax in Austria by virtue of the applicable double taxation convention (second clause of Paragraph 13(3) of the KStG 1988, as amended by the AbgÄG 2015). (49)

59. In so far as a non-resident beneficiary of a transfer from a private foundation is liable for capital gains tax in Austria, the foundation may therefore also deduct such a transfer from its taxable amount for corporation tax, in the same way as transfers to resident beneficiaries. In other words, regardless of where the beneficiary of a transfer from the private foundation is resident (in Austria or abroad), the private foundation may always deduct the transfer made to that beneficiary from its taxable amount for corporation tax, provided and to the extent that the beneficiary is subject to capital gains tax in Austria – where applicable, under a double taxation convention. With respect to the possible imposition of Austrian capital gains tax on the transfers of a private foundation to non-resident beneficiaries, the foregoing ensures an equivalent solution to that applicable in purely domestic cases.

60. Admittedly, the Austrian legislative regime does not go so far as to rule out any economic double taxation or double charges to tax of transfers made by a private foundation in cross-border cases. In particular, an economic double taxation remains possible in cases where a transfer is subject to tax both in Austria, as part of the corporation tax assessment for the private foundation making the transfer, and abroad, as part of the non-resident beneficiary’s assessment for income tax in that country. (50)

61. However, as EU law currently stands, such forms of economic double taxation or double charges to tax are not generally prohibited within the scope of the fundamental freedoms of the internal market. (51) At the present time, the Member States are not obliged to adapt their own tax systems to the different systems of tax of the other Member States in order, inter alia, to eliminate the double taxation arising from the exercise in parallel by those Member States of their fiscal sovereignty. (52) That conclusion applies a fortiori in relation to third countries such as Switzerland.

Summary

62. In conclusion, although it has the effect of restricting the free movement of capital within the meaning of Article 63(1) TFEU, a tax provision such as Paragraph 13(3) of the KStG 1988, as amended by the AbgÄG 2015, is justified under Article 65(1)(a) TFEU, read in conjunction with Article 65(3) TFEU, since the private foundations covered by that tax provision are in different situations depending on whether they make transfers to resident beneficiaries subject to capital gains tax or to beneficiaries resident abroad. Subject to closer examination by the referring court, the double taxation convention concluded between Austria and Switzerland does not alter that position.

VI. Conclusion

63. In the light of the foregoing considerations, I propose that the Court of Justice answer the question referred for a preliminary ruling by the Verwaltungsgerichtshof (Supreme Administrative Court, Austria) as follows:

Article 63(1) TFEU does not preclude a tax regime of a Member State under which a private foundation is permitted, for the purposes of its corporation tax assessment, to deduct from its taxable amount any transfers it has made to beneficiaries who are subject to capital gains tax in Austria, whereas no such deduction is possible where the foundation has made transfers to beneficiaries who are not themselves subject to capital gains tax in Austria.

1 Original language: German.

2 Judgment of 17 September 2015, F.E. Familienprivatstiftung Eisenstadt (C‑589/13, EU:C:2015:612).

3 BGBl. No 64/1975.

4 BGBl. No 1993/694.

5 BGBl. I No 163/2015.

6 For details on the temporal applicability of the legislative amendments, see Paragraph 26c(58) of the KStG 1988, as amended by the AbgÄG 2015.

7 Judgment of 17 September 2015 (C‑589/13, EU:C:2015:612).

8 See, in the same vein, the clarification already provided in the judgment of 17 September 2015, F.E. Familienprivatstiftung Eisenstadt (C‑589/13, EU:C:2015:612, paragraph 33).

9 According to the referring court, where a transfer from the private foundation to its beneficiaries is made in a year subsequent to that in which the foundation, for its part, generated the underlying capital earnings and was subject to corporation tax on those earnings, the foundation is entitled to a corresponding corporation tax credit (Paragraph 24(5) of the KStG 1988, as amended by the AbgÄG 2015). However, as is apparent from the facts of the case as set out by the Verwaltungsgerichtshof (Supreme Administrative Court) itself, that is simply not the case in the present dispute (see, in that regard, paragraph 1 of the order for reference).

10 See, to that effect, the judgment of 17 September 2015, F.E. Familienprivatstiftung Eisenstadt (C‑589/13, EU:C:2015:612, paragraph 38), concerning the previous Austrian legal situation.

11 Judgment of 17 September 2015, F.E. Familienprivatstiftung Eisenstadt (C‑589/13, EU:C:2015:612).

12 Judgments of 11 August 1995, Wielockx (C‑80/94, EU:C:1995:271, paragraph16); of 10 May 2012, Santander Asset Management SGIIC and Others (Joined Cases C‑338/11 to C‑347/11, EU:C:2012:286, paragraph 11); of 30 October 2025, Attal et Associés (C‑321/24, EU:C:2025:836, paragraph 27); and of 12 March 2026, Chefquet (C‑119/24, EU:C:2026:189, paragraph 29).

13 See my Opinion of 14 July 2005 in Bouanich (C‑265/04, EU:C:2005:479, point 26).

14 Council Directive 88/361/EEC of 24 June 1988 on the implementation of Article 67 of the Treaty (article repealed by the Treaty of Amsterdam) (OJ 1988 L 178, p. 5).

15 Judgments of 16 March 1999, Trummer and Mayer (C‑222/97, EU:C:1999:143, paragraph 21); of 17 September 2015, F.E. Familienprivatstiftung Eisenstadt (C‑589/13, EU:C:2015:612, paragraph 36); and of 13 November 2025, Familienstiftung (C‑142/24, EU:C:2025:873, paragraph 38).

16 Judgments of 27 January 2009, Persche (C‑318/07, EU:C:2009:33, paragraph 24); of 17 September 2015, F.E. Familienprivatstiftung Eisenstadt (C‑589/13, EU:C:2015:612, paragraph 36); and of 13 November 2025, Familienstiftung (C‑142/24, EU:C:2025:873, paragraph 38).

17 Judgment of 17 September 2015, F.E. Familienprivatstiftung Eisenstadt (C‑589/13, EU:C:2015:612, paragraphs 36 to 40).

18 Judgments of 14 September 2017, The Trustees of the BT Pension Scheme (C‑628/15, EU:C:2017:687, paragraph 32); of 30 April 2025, Finanzamt für Großbetriebe (C‑602/23, EU:C:2025:290, paragraph 44); and of 13 November 2025, Familienstiftung (C‑142/24, EU:C:2025:873, paragraph 52).

19 Judgment of 17 September 2015, F.E. Familienprivatstiftung Eisenstadt (C‑589/13, EU:C:2015:612, paragraphs 41 to 53).

20 Judgment of 17 September 2015, F.E. Familienprivatstiftung Eisenstadt (C‑589/13, EU:C:2015:612, paragraph 42).

21 Judgment of 17 September 2015, F.E. Familienprivatstiftung Eisenstadt (C‑589/13, EU:C:2015:612, paragraphs 45, 51 and 52); in the same vein, see judgment of 13 November 2025, Familienstiftung (C‑142/24, EU:C:2025:873, paragraph 49).

22 Judgment of 17 September 2015, F.E. Familienprivatstiftung Eisenstadt (C‑589/13, EU:C:2015:612, paragraph 47).

23 Judgment of 17 September 2015, F.E. Familienprivatstiftung Eisenstadt (C‑589/13, EU:C:2015:612, paragraph 48).

24 Judgment of 17 September 2015, F.E. Familienprivatstiftung Eisenstadt (C‑589/13, EU:C:2015:612, paragraph 53).

25 Judgment of 8 November 2007, Amurta (C‑379/05, EU:C:2007:655, paragraph 76, read in conjunction with paragraph 28); with respect to the freedom of establishment, see also the earlier landmark judgment of 28 January 1986, Commission v France (C‑270/83, EU:C:1986:37, in particular paragraphs 27 and 28, known also as the ‘Steuerguthaben’ or ‘avoir fiscal’ judgment).

26 Judgments of 10 May 2012, Santander Asset Management SGIIC and Others (Joined Cases C‑338/11 to C‑347/11, EU:C:2012:286, paragraph 15); of 26 February 2019, X (Controlled companies established in third countries) (C‑135/17, EU:C:2019:136, paragraph 55); of 7 April 2022, Veronsaajien oikeudenvalvontayksikkö(Exemption of contractual investment funds) (C‑342/20, EU:C:2022:276, paragraph 45); of 27 February 2025, Dyrektor Krajowej Informacji Skarbowej(Management form of a UCI) (C‑18/23, EU:C:2025:119, paragraph 57); and of 27 November 2025, Santander Renta Variable España Pensiones, Fondo de Pensiones (C‑525/24, EU:C:2025:922, paragraph 36); similarly judgment of 30 April 2025, Finanzamt für Großbetriebe (C‑602/23, EU:C:2025:290, paragraph 45).

27 Judgment of 17 September 2015 (C‑589/13, EU:C:2015:612, paragraph 53).

28 See, in that regard, judgment of 17 September 2015, F.E. Familienprivatstiftung Eisenstadt (C‑589/13, EU:C:2015:612, paragraph 43).

29 Judgment of 17 September 2015, F.E. Familienprivatstiftung Eisenstadt (C‑589/13, EU:C:2015:612, paragraph 43).

30 Judgment of 17 September 2015 (C‑589/13, EU:C:2015:612, paragraph 43).

31 Judgments of 26 February 2019, X (Controlled companies established in third countries) (C‑135/17, EU:C:2019:136); of 7 April 2022, Veronsaajien oikeudenvalvontayksikkö(Exemption of contractual investment funds) (C‑342/20, EU:C:2022:27); of 27 February 2025, Dyrektor Krajowej Informacji Skarbowej(Management form of a UCI) (C‑18/23, EU:C:2025:119); of 13 November 2025, Familienstiftung (C‑142/24, EU:C:2025:873); and of 27 November 2025, Santander Renta Variable España Pensiones, Fondo de Pensiones (C‑525/24, EU:C:2025:922).

32 See, in that respect, including with regard to terminology, point 40 et seq. of this Opinion.

33 Judgments of 26 February 2019, X (Controlled companies established in third countries) (C‑135/17, EU:C:2019:136, paragraph 61); of 7 April 2022, Veronsaajien oikeudenvalvontayksikkö(Exemption of contractual investment funds) (C‑342/20, EU:C:2022:276, paragraph 68); of 27 February 2025, Dyrektor Krajowej Informacji Skarbowej(Management form of a UCI) (C‑18/23, EU:C:2025:119, paragraph 77); of 13 November 2025, Familienstiftung (C‑142/24, EU:C:2025:873, paragraph 54); of 27 November 2025, Santander Renta Variable España Pensiones, Fondo de Pensiones (C‑525/24, EU:C:2025:922, paragraph 43); and of 12 March 2026, Chefquet (C‑119/24, EU:C:2026:189, paragraph 48).

34 Judgments of 12 December 2006, Test Claimants in Class IV of the ACT Group Litigation (C‑374/04, EU:C:2006:773, paragraph 50); of 10 May 2012, Santander Asset Management SGIIC and Others (Joined Cases C‑338/11 to C‑347/11, EU:C:2012:286, paragraph 27); and of 9 September 2021, Real Vida Seguros (C‑449/20, EU:C:2021:721, paragraph 38).

35 Judgments of 26 February 2019, X (Controlled companies established in third countries) (C‑135/17, EU:C:2019:136, paragraph 60); of 7 April 2022, Veronsaajien oikeudenvalvontayksikkö(Exemption of contractual investment funds) (C‑342/20, EU:C:2022:276, paragraph 67); of 27 February 2025, Dyrektor Krajowej Informacji Skarbowej(Management form of a UCI) (C‑18/23, EU:C:2025:119, paragraph 76); of 13 November 2025, Familienstiftung (C‑142/24, EU:C:2025:873, paragraph 53); and of 27 November 2025, Santander Renta Variable España Pensiones, Fondo de Pensiones (C‑525/24, EU:C:2025:922, paragraph 42).

36 Judgments of 26 February 2019, X (Controlled companies established in third countries) (C‑135/17, EU:C:2019:136, paragraph 61); of 7 April 2022, Veronsaajien oikeudenvalvontayksikkö(Exemption of contractual investment funds) (C‑342/20, EU:C:2022:276, paragraph 68); of 27 February 2025, Dyrektor Krajowej Informacji Skarbowej(Management form of a UCI) (C‑18/23, EU:C:2025:119, paragraph 77); of 13 November 2025, Familienstiftung (C‑142/24, EU:C:2025:873, paragraph 54); and of 27 November 2025, Santander Renta Variable España Pensiones, Fondo de Pensiones (C‑525/24, EU:C:2025:922, paragraph 43).

37 Judgments of 7 April 2022, Veronsaajien oikeudenvalvontayksikkö(Exemption of contractual investment funds) (C‑342/20, EU:C:2022:276, paragraph 69); of 27 February 2025, Dyrektor Krajowej Informacji Skarbowej(Management form of a UCI) (C‑18/23, EU:C:2025:119, paragraph 78); of 13 November 2025, Familienstiftung (C‑142/24, EU:C:2025:873, paragraph 56); and of 27 November 2025, Santander Renta Variable España Pensiones, Fondo de Pensiones (C‑525/24, EU:C:2025:922, paragraph 44); in the same vein, see judgment of 16 December 2008, Arcelor Atlantique et Lorraine and Others (C‑127/07, EU:C:2008:728, paragraphs 25 and 26).

38 Judgments of 10 May 2012, Santander Asset Management SGIIC and Others (Joined Cases C‑338/11 to C‑347/11, EU:C:2012:286, paragraph 28); of 7 April 2022, Veronsaajien oikeudenvalvontayksikkö(Exemption of contractual investment funds) (C‑342/20, EU:C:2022:276, paragraph 70); of 27 February 2025, Dyrektor Krajowej Informacji Skarbowej(Management form of a UCI) (C‑18/23, EU:C:2025:119, paragraph 79); of 13 November 2025, Familienstiftung (C‑142/24, EU:C:2025:873, paragraph 56); and of 27 November 2025, Santander Renta Variable España Pensiones, Fondo de Pensiones (C‑525/24, EU:C:2025:922, paragraph 44).

39 Judgment of 12 December 2006, Test Claimants in Class IV of the ACT Group Litigation (C‑374/04, EU:C:2006:773, paragraph 59, at the end); in the same vein, judgments of 17 September 2009, Glaxo Wellcome (C‑182/08, EU:C:2009:559, paragraph 83); and of 25 October 2012, Commission v Belgium (C‑387/11, EU:C:2012:670, paragraph 78).

40 Case C‑533/25.

41 Judgment of 17 September 2015 (C‑589/13, EU:C:2015:612, paragraph 73).

42 Judgment of 7 September 2004, Manninen (C‑319/02, EU:C:2004:484, paragraph 49); of 12 December 2002, Lankhorst-Hohorst (C‑324/00, EU:C:2002:749, paragraph 36); and of 17 September 2009, Glaxo Wellcome (C‑182/08, EU:C:2009:559, paragraph 82).

43 In any event, transfers to beneficiaries resident abroad to whom one of the traditional double taxation conventions, modelled on the Organisation for Economic Co-operation and Development (OECD) Model Tax Convention, applies.

44 See, to that effect, judgments of 12 December 2006, Test Claimants in Class IV of the ACT Group Litigation (C‑374/04, EU:C:2006:773, paragraph 58); of 8 November 2007, Amurta (C‑379/05, EU:C:2007:655, paragraph 37); and of 17 September 2009, Glaxo Wellcome (C‑182/08, EU:C:2009:559, paragraphs 69 and 70); similarly, judgment of 17 December 2015, Timac Agro Deutschland (C‑388/14, EU:C:2015:829, paragraph 27).

45 See the landmark judgment of 14 February 1995, Schumacker (C‑279/93, EU:C:1995:31, paragraph 31), on the free movement of workers in the context of taxation of the wages of cross-border commuters; see also judgment of 12 July 2005, Schempp (C‑403/03, EU:C:2005:446, paragraph 35), on the free movement of EU citizens in connection with the taxation of maintenance payments in a cross-border context.

46 See, in that regard, the landmark judgment of 19 January 2006, Bouanich (C‑265/04, EU:C:2006:51, paragraph 51), as well as my Opinion in that case (EU:C:2005:479, points 44 to 51); see also the judgments of 8 November 2007, Amurta (C‑379/05, EU:C:2007:655, paragraph 80); and of 24 October 2018, Sauvage and Lejeune (C‑602/17, EU:C:2018:856, paragraph 18). In the case preceding the case at hand, the Court also considered the double taxation conventions applicable in that case to be relevant: see judgment of 17 September 2015, F.E. Familienprivatstiftung Eisenstadt (C‑589/13, EU:C:2015:612, in particular paragraph 64).

47 Judgment of 17 September 2015, F.E. Familienprivatstiftung Eisenstadt (C‑589/13, EU:C:2015:612, paragraph 64).

48 Judgments of 12 December 2006, Test Claimants in Class IV of the ACT Group Litigation (C‑374/04, EU:C:2006:773, paragraph 70); of 8 November 2007, Amurta (C‑379/05, EU:C:2007:655, paragraph 39); and of 7 November 2024, XX (Unit-linked contracts) (C‑782/22, EU:C:2024:932, paragraph 62).

49 In that regard, the present case differs fundamentally from that in Santander Asset Management SGIIC, in which a national provision that failed to take such account of the tax situation of the dividend recipients was under scrutiny (see judgment of 10 May 2012, Santander Asset Management SGIIC and Others, Joined Cases C‑338/11 to C‑347/11, EU:C:2012:286, in particular paragraph 30, second sentence, paragraphs 32 and 37 to 40).

50 In certain cases, even resident beneficiaries – that is to say, beneficiaries liable to pay capital gains tax in Austria – of a transfer from a private foundation may be subject to double taxation, namely where those beneficiaries themselves are subject not only to the Austrian tax jurisdiction but also, as regards their worldwide income, to the tax jurisdiction of a third State; that may be the case, for example, with United States nationals, irrespective of their place of residence – subject, of course, to any applicable double taxation conventions.

51 Judgments of 14 November 2006, Kerckhaert and Morres (C‑513/04, EU:C:2006:713, paragraph 22); of 12 February 2009, Block (C‑67/08, EU:C:2009:92, paragraph 30); and of 15 April 2010, CIBA (C‑96/08, EU:C:2010:185, paragraph 27).

52 Judgments of 12 February 2009, Block (C‑67/08, EU:C:2009:92, paragraph 31); of 15 April 2010, CIBA (C‑96/08, EU:C:2010:185, paragraph 28); and of 26 February 2020, Stanleyparma and Stanleybet Malta (C‑788/18, EU:C:2020:110, paragraph 23); in the same vein, see judgment of 6 December 2007, Columbus Container Services (C‑298/05, EU:C:2007:754, paragraph 51).

Opinion of Advocate General Kokott delivered on 10 September 2026.###

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