Judgment — ECLI:EU:C:2024:1023
Date: 2024-12-12
Language of the case: Dutch
Court formation: Sixth Chamber
Subject matter: Right of establishment
Procedure: Reference for a preliminary ruling
Origin: Belgium

Summary of the request for a preliminary ruling pursuant to Article 98(1) of 
the Rules of Procedure of the Court of Justice 
Date lodged:  
13 July 2023 
Referring court: 
Hof van Beroep te Gent (Belgium) 
Date of the decision to refer: 
13 June 2023 
Applicant: 
Belgisch Staat / Federale Overheidsdienst Financiën 
Defendant: 
Volvo Group Belgium NV 
  
Subject matter of the main proceedings 
This request was lodged in connection with proceedings concerning a statutory 
scheme which introduced a ‘fairness tax’. The Grondwettelijk Hof (Constitutional 
Court, Belgium) overturned that scheme but maintained its effects, including for 
the assessment years 2015 and 2016, thereby making the defendant liable for the 
fairness tax for the assessment years in question. The assessments in question 
were annulled at first instance. The Belgische Staat (Belgian State) has now 
appealed against that annulment. 
Subject matter and legal basis of the request 
In this request for a preliminary ruling under Article 267 TFEU, the referring 
court asks a question concerning the maintenance of the effects of legislative 
provisions imposing a fairness tax following their annulment by the Constitutional 
Court. Specifically, it asks whether the maintenance decision of the Constitutional 
Court constitutes an infringement of the freedom of establishment enshrined in 
Article 49 TFEU in a situation in which the referring court disapplies that decision 
EN 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING – CASE C-436/23 
 
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with regard to non-resident companies with a permanent establishment in Belgium 
because the provisions in question run counter to the freedom of establishment, 
resulting in those companies suddenly being treated more favourably than 
subsidiaries of non-resident companies, which are still liable to pay that fairness 
tax. 
Question referred for a preliminary ruling 
Must Article 49 of the Treaty on the Functioning of the European Union be 
interpreted as precluding a national scheme, such as that being challenged before 
the Court (specifically that which was annulled by the Constitutional Court but 
whose effects were maintained, albeit with an infringement of the freedom of 
establishment as a result of which the maintained national scheme must be 
disapplied in respect of the profits distributed by companies established in another 
Member State with a Belgian permanent establishment), and whereby 
- a tax is payable on the distribution of profits which were not included in the 
final taxable result of a resident company, in respect of which a company 
established in another Member State has such an influence on the resident 
company’s management that it can determine its activities, 
- whereas that tax is not payable on the profits concerned if that company, 
established in another Member State, carries on its activities in Belgium through a 
permanent establishment/branch? 
Provisions of European Union law relied on 
TFEU, Article 49 
Provisions of national law relied on 
Law of 30 July 2013 containing various provisions (Belgian Official Journal, 
1 August 2013), Articles 43 to 51 
Income Tax Code 1992 (WIB), Article 219b and Article 233(3) 
Special Law of 6 January 1989 on the Constitutional Court, Article 8(3) 
Succinct presentation of the facts and procedure in the main proceedings 
1 By Articles 43 to 51 of the Law of 30 July 2013 containing various provisions, the 
Income Tax Code 1992 (‘WIB 92’) was amended. This introduced a ‘fairness tax’, 
a tax distinct from corporate tax and non-residents’ tax, which both resident and 
non-resident companies must pay when they distribute dividends which, owing to 
their use of certain tax advantages provided for by the national tax system, are not 
VOLVO GROUP BELGIUM 
 
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included in their final taxable profits. The purpose of the fairness tax is to tax the 
profits that are distributed by companies without corporate tax or non-residents’ 
tax having been paid on them. 
2 On 31 January 2014, an action for annulment of the relevant articles of the Law of 
30 July 2013 was brought before the Constitutional Court. In that context, the 
Constitutional Court referred questions to the Court of Justice for a preliminary 
ruling, giving rise to the judgment of 17 May 2017 (C-68/15, X v Ministerraad, 
EU:C:2017:379), in which the Court stated, inter alia, that the national court must 
examine whether the manner in which the taxable amount of the fairness tax is 
calculated in fact leads to non-resident companies being treated in a less 
favourable manner than resident companies and, if so, decide that there has been 
an infringement of the freedom of establishment. 
3 The Constitutional Court annulled the statutory scheme for the fairness tax by a 
judgment of 1 March 2018, but essentially maintained the effects of the annulled 
provisions for the assessment years 2014 to 2018. Article 8(3) of the Special Law 
of 6 January 1989 gives the Constitutional Court the possibility itself to regulate 
by general order the scope of the maintenance of the effects of annulled 
provisions. The Constitutional Court has that possibility, in view of the principle 
of legal certainty, in order to mitigate the erga omnes and ex tunc effects thereof. 
4 For the assessment years 2015 and 2016, the defendant in the main proceedings 
owed, for corporate tax purposes, inter alia, the fairness tax. It had raised 
objections to that. 
5 The applicant declared the objections unfounded in view of the maintenance 
decision of the Constitutional Court. 
6 The defendant in the main proceedings then brought an action before the 
rechtbank van eerste aanleg Oost-Vlaanderen, afdeling Gent (East Flanders Court 
of First Instance, Ghent Division), which annulled the corporate tax assessments 
in question for the assessment years 2015 and 2016. 
7 In particular, the Court of First Instance was of the view that the maintenance 
decision of the Constitutional Court infringed the freedom of establishment. It 
follows from the judgment of the Court of Justice of 17 May 2017 namely that 
Article 233(3) WIB 92 – on the basis of which Belgian establishments of non-
resident companies are in principle subject to fairness tax, even if the profits of the 
Belgian establishment do not form part of the dividends distributed by the non-
resident companies – infringes the freedom of establishment, since it treats non-
resident companies with a Belgian establishment less favourably than resident 
companies. That article must therefore be disapplied in respect of non-resident 
companies with a Belgian establishment, which in turn has the effect of treating 
those companies more favourably than resident companies, including subsidiaries 
of non-resident companies – such as the defendant in the main proceedings – since 
the fairness tax is maintained only in respect of resident companies. 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING – CASE C-436/23 
 
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8 The applicant in the main proceedings brought an appeal before the referring 
court, which decided to refer a question to the Court of Justice for a preliminary 
ruling. 
The essential arguments of the parties in the main proceedings 
9 The applicant claims that no infringement of the freedom of establishment can be 
established since it is not clear how the taxable amount for Belgian establishments 
must be calculated, and it cannot therefore be established whether or not this 
method of calculation is less favourable than the calculation of the taxable amount 
in respect of Belgian companies. Even if a restriction of the freedom of 
establishment were found, there would be no infringement of the principle of 
equality or freedom of establishment, since Belgian permanent establishments and 
Belgian subsidiaries are in a different situation. Moreover, a restriction is also 
justified by overriding reasons in the public interest. 
10 According to the applicant, the court at first instance should therefore have 
respected the maintenance decision. 
11 The applicant also argues that the legislative provisions introducing the fairness 
tax are amenable to review under EU law, but the maintenance decision of the 
Constitutional Court is not. 
12 The defendant alleges infringement of the freedom of establishment laid down in 
Article 49 TFEU. Having regard to the decision of the Constitutional Court to 
maintain the effects of the annulled provisions for the assessment years 2014 to 
2018, and to the fact that Article 233(3) WIB 92 must, due to an infringement of 
the freedom of establishment, be disapplied in respect of non-resident companies 
with a permanent establishment in Belgium, the fairness tax does apply to resident 
companies (including subsidiaries of non-resident companies such as itself), but 
not to Belgian establishments of non-resident companies. As a result, the parent 
company, which normally can freely choose, under the principle of freedom of 
establishment, the legal form (branch, subsidiary or agency) in which to conduct 
its business in Belgium, is wrongly restricted in that choice. There is no 
justification for this, both categories of legal entity being in a similar situation in 
the light of the goal of the fairness tax. 
13 Such a restriction of the freedom of establishment is also disproportionate, since 
its basis is in Article 8(3) of the Special Law of 6 January 1989, which offers the 
Constitutional Court the possibility to exclude from its maintenance decision 
claimants who have lodged an objection in a timely manner, such as the defendant 
in the main proceedings, and it is unforeseeable whether the Court will make use 
of that possibility (which it did not do in the present case), thereby infringing the 
principle of legal certainty. 
VOLVO GROUP BELGIUM 
 
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Succinct presentation of the reasoning in the request for a preliminary ruling 
14 The referring court agrees with the opinion of the court at first instance in the 
sense that the effect of Article 233(3) WIB 92 is that a non-resident company with 
a permanent establishment in Belgium is treated less favourably than a resident 
company, including a subsidiary of a non-resident company – such as the 
defendant in the main proceedings – by the maintenance decision of the 
Constitutional Court, and that this provision therefore constitutes a restriction of 
the freedom of establishment laid down in Article 49 TFEU. For Belgian 
establishments of non-resident companies, the taxable amount of the fairness tax 
is in fact linked to the distribution of a fictional dividend formed by the portion of 
the gross dividends distributed by the non-resident company that corresponds 
proportionately to the positive share of the accounting result of its Belgian 
establishment in the overall accounting result of the non-resident company. The 
result of this is that the establishment is subject to fairness tax, even if the 
dividends from the non-resident company do not include profits of the Belgian 
establishment that fall under Belgian tax jurisdiction. In contrast, the taxable 
amount of the fairness tax for a resident company is always determined by the 
Belgian taxable result. 
15 This restriction of the freedom of establishment does not pertain to situations 
which are not objectively comparable, nor can it be justified by overriding reasons 
in the public interest. That restriction must therefore be declared disapplied. 
16 Given that the fairness tax, in the light of the maintenance decision and the fact 
that Article 233(3) WIB 92 is disapplied in respect of Belgian establishments of 
non-resident companies, does apply to subsidiaries of non-resident companies and 
not to permanent establishments thereof, the referring court questions whether this 
leads to an infringement of Article 49 TFEU.