Provisional text
JUDGMENT OF THE COURT (Ninth Chamber)
19 March 2026 (*)
( Reference for a preliminary ruling – State aid – Regulation (EU) No 651/2014 – Categories of aid which may be considered to be compatible with the internal market – Exemption provided for aid to small and medium-sized enterprises (SMEs) – Article 1 of Annex I – Concept of an ‘enterprise’ – Article 3(3) of Annex I – Concept of ‘linked enterprises’ – Natural person holding the majority of voting rights associated with the shares of an enterprise – Engaging in an economic activity – Actual control exercised through direct or indirect involvement in the management of the enterprise )
In Case C‑870/24,
REQUEST for a preliminary ruling under Article 267 TFEU from the Administratīvā apgabaltiesa (Regional Administrative Court, Latvia), made by decision of 14 December 2024, received at the Court on 17 December 2024, in the proceedings
Valsts ieņēmumu dienests
v
SIA „OUTLETICO”,
THE COURT (Ninth Chamber),
composed of M. Condinanzi, President of the Chamber, R. Frendo and A. Kornezov (Rapporteur), Judges,
Advocate General: A. Biondi,
Registrar: A. Calot Escobar,
having regard to the written procedure,
after considering the observations submitted on behalf of:
–        the Latvian Government, by J. Davidoviča and K. Pommere, acting as Agents,
–        the Belgian Government, by P. Cottin and M. Van Regemorter, acting as Agents,
–        the European Commission, by A.-L. Delbac,
V. Hitrovs and A. Steiblytė, acting as Agents,
having decided, after hearing the Advocate General, to proceed to judgment without an Opinion,
gives the following
Judgment
1        This request for a preliminary ruling concerns the interpretation of Article 1 and Article 3(3) of Annex I to Commission Regulation (EU) No 651/2014 of 17 June 2014 declaring certain categories of aid compatible with the internal market in application of Articles 107 and 108 [TFEU] (OJ 2014 L 187, p. 1), as amended by Commission Regulation (EU) 2020/972 of 2 July 2020 (OJ 2020 L 215, p. 3) (‘Regulation No 651/2014’).
2        The request has been made in proceedings between Valsts ieņēmumu dienests (National Tax Authority, Latvia) (‘the tax authority’) and SIA „OUTLETICO” (‘Outletico’), a company incorporated under Latvian law, and concerning a decision by which the tax authority ordered Outletico to repay the aid which it claims was unlawfully received in the context of the health crisis linked to the COVID-19 pandemic.
Legal context
European Union law
Regulation No 651/2014
3        Recitals 30 and 40 of Regulation No 651/2014 state:
‘(30)      To eliminate differences that might give rise to distortions of competition and to facilitate coordination between different Union and national initiatives concerning [small and medium-sized enterprises (SMEs)], as well as for reasons of administrative clarity and legal certainty, the definition of SME used for the purpose of this Regulation should be based on the definition in Commission Recommendation 2003/361/EC of 6 May 2003 concerning the definition of micro, small and medium sized enterprises [(OJ 2003 L 124, p. 36)].
…
(40)      SMEs play a decisive role in job creation and, more generally, act as a factor of social stability and economic development. However, their development may be hampered by market failures, leading to these SMEs suffering from the following typical handicaps. SMEs often have difficulties in obtaining capital or loans, given the risk-averse nature of certain financial markets and the limited collateral that they may be able to offer. Their limited resources may also restrict their access to information, notably regarding new technology and potential markets. To facilitate the development of the economic activities of SMEs, this Regulation should therefore exempt certain categories of aid when they are granted in favour of SMEs. Those categories should include, in particular SME investment aid and SME participation in fairs.’
4        Article 1 of Regulation No 651/2014 provides:
‘1.      This Regulation shall apply to the following categories of aid:
…
(b)      aid to SMEs in the form of investment aid, operating aid and SMEs’ access to finance;
…
4.      This Regulation shall not apply to:
…
(c)      aid to undertakings in difficulty, with the exception of aid schemes to make good the damage caused by certain natural disasters, start-up aid schemes and regional operating aid schemes, provided those schemes do not treat undertakings in difficulty more favourably than other undertakings. However, this Regulation shall apply by derogation to undertakings which were not in difficulty on 31 December 2019 but became undertakings in difficulty in the period from 1 January 2020 to 30 June 2021.
…’
5        Article 2 of Regulation No 651/2014 provides:
‘For the purposes of this Regulation the following definitions shall apply:
…
(2)      “[SMEs]” means undertakings fulfilling the criteria laid down in Annex I;
…
(18)      “undertaking in difficulty” means an undertaking in respect of which at least one of the following circumstances occurs:
(a)      In the case of a limited liability company (other than an SME that has been in existence for less than three years or, for the purposes of eligibility for risk finance aid, an SME within 7 years from its first commercial sale that qualifies for risk finance investments following due diligence by the selected financial intermediary), where more than half of its subscribed share capital has disappeared as a result of accumulated losses. …
…
(e)      In the case of an undertaking that is not an SME, where, for the past two years:
(1)      the undertaking’s book debt to equity ratio has been greater than [7.5] and
(2)      the undertaking’s EBITDA interest coverage ratio has been below [1.0].
…
(24)      “large enterprises” means undertakings not fulfilling the criteria laid down in Annex I;
…’
6        Under Article 3 of Regulation No 651/2014:
‘Aid schemes, individual aid granted under aid schemes and ad hoc aid shall be compatible with the internal market within the meaning of Article 107(2) or (3) [TFEU] and shall be exempted from the notification requirement of Article 108(3) [TFEU] provided that such aid fulfils all the conditions laid down in Chapter I of this Regulation, as well as the specific conditions for the relevant category of aid laid down in Chapter III of this Regulation.’
7        Annex I to Regulation No 651/2014, entitled ‘SME definition’, provides, in Article 1 thereof:
‘An enterprise is considered to be any entity engaged in an economic activity, irrespective of its legal form. This includes, in particular, self-employed persons and family businesses engaged in craft or other activities, and partnerships or associations regularly engaged in an economic activity.’
8        Article 2 of Annex I provides:
‘1.      The category of micro, small and medium-sized enterprises (“SMEs”) is made up of enterprises which employ fewer than 250 persons and which have an annual turnover not exceeding EUR 50 million, and/or an annual balance sheet total not exceeding EUR 43 million.
2.      Within the SME category, a small enterprise is defined as an enterprise which employs fewer than 50 persons and whose annual turnover and/or annual balance sheet total does not exceed EUR 10 million.
3.      Within the SME category, a micro-enterprise is defined as an enterprise which employs fewer than 10 persons and whose annual turnover and/or annual balance sheet total does not exceed EUR 2 million.’
9        Under Article 3 of Annex I:
‘1.      An “autonomous enterprise” is any enterprise which is not classified as a partner enterprise within the meaning of paragraph 2 or as a linked enterprise within the meaning of paragraph 3.
…
3.      “Linked enterprises” are enterprises which have any of the following relationships with each other:
(a)      an enterprise has a majority of the shareholders’ or members’ voting rights in another enterprise;
(b)      an enterprise has the right to appoint or remove a majority of the members of the administrative, management or supervisory body of another enterprise;
(c)      an enterprise has the right to exercise a dominant influence over another enterprise pursuant to a contract entered into with that enterprise or to a provision in its memorandum or articles of association;
(d)      an enterprise, which is a shareholder in or member of another enterprise, controls alone, pursuant to an agreement with other shareholders in or members of that enterprise, a majority of shareholders’ or members’ voting rights in that enterprise.
…
Enterprises having any of the relationships described in the first subparagraph through one or more other enterprises, or any one of the investors mentioned in paragraph 2, are also considered to be linked.
Enterprises which have one or other of such relationships through a natural person or group of natural persons acting jointly are also considered linked enterprises if they engage in their activity or in part of their activity in the same relevant market or in adjacent markets.
…’
10      Article 6 of Annex I is worded as follows:
‘1.      In the case of an autonomous enterprise, the data, including the number of staff, are determined exclusively on the basis of the accounts of that enterprise.
2.      The data, including the headcount, of an enterprise having partner enterprises or linked enterprises are determined on the basis of the accounts and other data of the enterprise or, where they exist, the consolidated accounts of the enterprise, or the consolidated accounts in which the enterprise is included through consolidation.
To the data referred to in the first subparagraph are added the data of any partner enterprise of the enterprise in question situated immediately upstream or downstream from it. Aggregation is proportional to the percentage interest in the capital or voting rights (whichever is greater). In the case of cross-holdings, the greater percentage applies.
To the data referred to in the first and second subparagraph are added 100% of the data of any enterprise, which is linked directly or indirectly to the enterprise in question, where the data were not already included through consolidation in the accounts.
…’
Temporary Framework
11      Points 4, 18 and 22 of the Communication from the Commission entitled ‘Temporary Framework for State aid measures to support the economy in the current COVID-19 outbreak’ (OJ 2020 C 91 I, p. 1), as amended by the Communication from the Commission of 28 January 2021 (OJ 2021 C 34, p. 6), state:
‘4.      In the exceptional circumstances created by the COVID-19 outbreak, undertakings of all kinds may face a severe lack of liquidity. Solvent or less solvent undertakings alike may face a sudden shortage or even unavailability of liquidity. SMEs are at particular risk. This can therefore seriously affect the economic situation of many healthy undertakings and their employees in the short and medium term, while having also longer-lasting effects by endangering their survival.
…
18.      Considering that the COVID-19 outbreak affects all Member States and that the containment measures taken by Member States impact undertakings, the [European] Commission considers that State aid is justified and can be declared compatible with the internal market on the basis of Article 107(3)(b) TFEU, for a limited period, to remedy the liquidity shortage faced by undertakings and ensure that the disruptions caused by the COVID-19 outbreak do not undermine their viability, especially of SMEs.
…
22.      The Commission will consider [a temporary limited amount of State aid granted to undertakings that find themselves facing a sudden shortage or even unavailability of liquidity] compatible with the internal market on the basis of Article 107(3)(b) TFEU, provided that all the following conditions are met …
…
c.      aid may not be granted to undertakings that were already in difficulty (within the meaning of [Regulation No 651/2014] …) on 31 December 2019; In derogation to the above, aid can be granted to micro or small enterprises (within the meaning of Annex I
[to Regulation No 651/2014]) that were already in difficulty on 31 December 2019 provided that they are not subject to collective insolvency procedure under national law, and that they have not received rescue aid … or restructuring aid …
…’
Latvian law
12      Article 4.1 of Council of Ministers Decree No 676 of 10 November 2020 on aid intended to support the working capital requirements of undertakings affected by the COVID-19 crisis, in the version applicable to the facts in the main proceedings (‘Decree No 676/2020’), provides:
‘In accordance with this decree, aid may be granted to undertakings fitting the definitions of a micro, small or medium-sized enterprise, under
Article 2 of Annex I to Regulation No 651/2014, or the definition of a large enterprise, under
point 24 of Article 2 of [that regulation].’
13      Under Article 5 of that decree:
‘For the purposes of [this Decree], linked persons are economic operators fitting the definition of “linked enterprises” established in Article 3(3) of Annex I to Regulation No 651/2014.’
14      Article 16.2 of that decree is worded as follows:
‘Aid shall not be granted to medium-sized or large economic operators which, already on 31 December 2019 and at the time the aid is to be granted, are to be regarded as being in difficulty, in accordance with the definition established in point 18 of Article 2 of Regulation No 651/2014.’
15      Article 18 of Decree No 676/2020 provides:
‘Where the rules on State aid laid down in this Decree are found to have been infringed, the undertaking shall be obliged to repay, to the National Tax Authority, the whole amount of the unlawfully received State aid, together with interest, in accordance with the provisions of Chapters IV and V of the Law on the control of aid for commercial activity.’
16      Article 186(3) of the Komerclikums (Commercial Code) states:
‘Shares entitle the shareholder to take part in the administration of the company, in the distribution of profits and in the division of company assets in the event of the liquidation of the company, and also confer other rights as established by law and provided for in the articles of association.’
17      Article 209 of that code provides:
‘The governing bodies of a company are the general meeting, the board of directors and the supervisory board (where such a body has been set up).’
18      Under Article 210 of that code:
‘(1)      Only the general meeting shall be competent to:
1)      make changes to the articles of association;
2)      increase or reduce the share capital;
3)      appoint and remove members of the supervisory board;
4)      appoint and remove members of the board of directors;
5)      approve the annual accounts and distribute profits;
6)      appoint and remove the auditor and liquidator;
7)      resolve to bring an action against members of the board of directors, members of the supervisory board, founders or shareholders, and appoint a representative of the company to conduct proceedings before the courts;
…
9)      resolve to end, continue, suspend, renew or reorganise the activities of the company, and resolve on the conclusion, modification or termination of a group of companies agreement;
10)      conduct other matters which, by law or by means of the articles of association, are within the competence of the general meeting.
(2)      The general meeting is also entitled to take decisions that are within the competence of the board of directors or the supervisory board. In such cases, those shareholders who voted in favour of the decision shall be jointly and severally liable for any losses caused as a result.’
The dispute in the main proceedings and the questions referred for a preliminary ruling
19      A, a natural person, owns 100% of the capital of SIA „Esterkin Family Investments”, a company incorporated under Latvian law, 75% of the capital of SIA „IC Industries Holdings”, also a company incorporated under Latvian law, and 100% of the capital of RRE Tradecenters holding Ltd., a company incorporated under Cypriot law. The latter company holds shares in Outletico, amounting to 60% of that company’s capital; in turn, Outletico owns 100% of the capital of SIA „Business Park”, another company incorporated under Latvian law.
20      On 21 March and 16 April 2021, Outletico applied to the tax authority in order to be granted aid to undertakings affected by the COVID-19 crisis in respect of January and March 2021 respectively.
21      By decisions of 30 April 2021 and 17 May 2021, the tax authority approved those requests for aid and, accordingly,
granted Outletico EUR 45 597.69 in respect of January 2021 and EUR 45 597.68 in respect of March 2021. The tax authority regarded Outletico as being an SME within the meaning of Regulation No 651/2014 and established that it satisfied the criteria set out in Decree No 676/2020 for receiving aid.
22      By two decisions of 27 December 2021, the tax authority’s office in charge of tax collection, taking the view that Outletico fell under the category of ‘large enterprises’ and that, on 31 December 2019 and on the date the aid was granted, it was an undertaking in difficulty, annulled the decisions referred to in the preceding paragraph and ordered that it repay the unlawfully received aid.
23      Outletico lodged complaints against that office’s decisions.
24      By decision of 25 March 2022, the tax authority upheld those decisions. It considered, in the first place, that RRE Tradecenters holding, Esterkin Family Investments, IC Industries Holdings
and Business Park had to be regarded as enterprises which are ‘linked’ to Outletico, within the meaning of Article 3(3) of Annex I to Regulation No 651/2014, and that, as a member of a group of linked enterprises, Outletico had to be regarded, on the basis of data relating to all of the companies in that group, as being part of a ‘large enterprise’, within the meaning of point 24 of Article 2 of Regulation No 651/2014.
25      The tax authority found, at the outset, that it was apparent from the companies register that, on the date the aid at issue was granted, RRE Tradecenters holding had a controlling interest in Outletico, which, in turn, also held such an interest in Business Park. Subsequently, the tax authority took the view that, since the natural person A directly managed and controlled RRE Tradecenters holding, Esterkin Family Investments and IC Industries Holdings, he had to be regarded as being an economic operator and therefore an ‘enterprise’ within the meaning of Article 1 and of the third subparagraph of Article 3(3) of Annex I.
Lastly, it concluded that Esterkin Family Investments and IC Industries Holdings, on the one hand, and Outletico, on the other, had relationships through an enterprise and not through a ‘natural person’, within the meaning of the fourth subparagraph of Article 3(3) of Annex I.
26      The tax authority, in the second place, considered that, on 31 December 2019 and on the date the aid was granted, Outletico, in the light of its own data and of those relating to the enterprises linked to it, had to be regarded as being an ‘undertaking in difficulty’, within the meaning of point 18 of Article 2 of that regulation, and that, as a consequence, it was not eligible to receive that aid.
27      Outletico brought an action before the Administratīvā rajona tiesa (District Administrative Court, Latvia) seeking the annulment of the tax authority’s decision of 25 March 2022, challenging inter alia the application of the concept of ‘linked enterprises’ to it. In particular, Outletico submitted that A had to be regarded as being a natural person and not an enterprise.
28      By judgment of 22 November 2022, that court annulled that decision, on the ground that A was a natural person and not an enterprise, with the result that, pursuant to the fourth subparagraph of Article 3(3) of Annex I to Regulation No 651/2014, Outletico could not be regarded as being linked to Esterkin Family Investments and to IC Industries Holdings, since those three companies did not engage in their activity in the same market or in adjacent markets. That court considered that Outletico was only linked to RRE Tradecenters holding and to Business Park and that, on that basis, Outletico had to be classified as an SME within the meaning of Regulation No 651/2014, with the result that it could claim the aid at issue in the main proceedings.
29      The tax authority brought an appeal against that judgment before the Administratīvā apgabaltiesa (Regional Administrative Court, Latvia), which is the referring court, contending inter alia that when a natural person directly or indirectly manages and controls a number of enterprises, that person has to be regarded as being an economic operator and therefore an ‘enterprise’, within the meaning of Article 1 and the third subparagraph of Article 3(3) of Annex I to Regulation No 651/2014.
30      The referring court points out that the dispute in the main proceedings concerns the question of which enterprises must be regarded as being linked to Outletico for the latter to be classified as an SME or a ‘large enterprise’, within the meaning of Regulation No 651/2014. In that regard, that court raises the question of the scope of the concept of ‘enterprise’, within the meaning of Article 1 of Annex I to that regulation, and in particular of whether that concept includes a natural person who holds a controlling interest in a number of companies. Consequently, that court is uncertain whether Outletico, on the one hand, and Esterkin Family Investments and IC Industries Holdings, on the other, must be regarded as having relationships through an ‘enterprise’, within the meaning of the third subparagraph of Article 3(3) of Annex I, or a ‘natural person’, within the meaning of the fourth subparagraph of Article 3(3) of Annex I, in which case it would not be possible to regard those three enterprises as being linked.
31      According to the referring court, it follows from the judgment of 10 January 2006, Cassa di Risparmio di Firenze and Others (C‑222/04, EU:C:2006:8), that, for the purpose of determining the existence of an economic activity where a natural person holds shares in a company which engages in that activity directly on the market, it is insufficient to establish that that natural person holds those shares, or even a controlling interest, but it is necessary to examine whether that natural person has an actual influence over the management of that company.
32      In that regard, the referring court observes that, in its decision of 25 March 2022, the tax authority concluded,
on the sole basis of the size of A’s shareholding in Esterkin Family Investments and in IC Industries Holdings, that A directly managed and controlled those companies. That court explains that, pursuant to Article 186(3) and to Article 210(1) and (2) of the Commercial Code, it is for the general meeting (the shareholders’ meeting) to adopt certain decisions connected with the management of the company.
33      That court therefore raises the question whether those decision-making powers alone are sufficient to regard a natural person with a controlling interest in a company as also exercising actual control over that company by directly or indirectly exerting influence over its management and, therefore, as engaging in an economic activity or as taking part in the economic activity of that company and, as a result, as constituting an enterprise.
34      In those circumstances, the Administratīvā apgabaltiesa (Regional Administrative Court) decided to stay the proceedings and to refer the following questions to the Court of Justice for a preliminary ruling:
‘(1)      Must Article 1 and Article 3(3) of Annex I to [Regulation No 651/2014] be interpreted as meaning that a natural person who holds shares in an undertaking must also be regarded as an enterprise?
Is the answer to the preceding question affected where the national legislation provides that the taking of certain decisions connected with the management of the undertaking is the competence of the general meeting (the shareholders’ meeting)? Does the foregoing, in itself, constitute a sufficient basis for finding that a natural person who holds shares in an undertaking (the majority of the shareholder voting rights) directly or indirectly influences the management of the undertaking and, therefore, engages in an economic activity or is involved in the economic activity of that undertaking, without there being any need to assess whether the natural person actually takes part in the management of the undertaking?
(2)      Must [the fourth subparagraph of Article 3(3)] of Annex I to [Regulation No 651/2014] be interpreted as meaning that the expression “enterprises which have one or other of such relationships through a natural person”, within the meaning of that provision, also includes a situation in which a natural person is a shareholder and holds the majority of the voting rights in an undertaking which, in turn, holds the majority of the shareholder voting rights in another undertaking, where that second undertaking is considered to be a linked enterprise in respect of other undertakings and, in those latter undertakings, that same natural person is a shareholder and holds the majority of the shareholder voting rights?’
Consideration of the questions referred
35      According to settled case-law, in the procedure laid down by Article 267 TFEU providing for cooperation between national courts and the Court of Justice, it is for the latter to provide the national court with an answer which will be of use to it and enable it to determine the case before it. To that end, the Court should, where necessary, reformulate the questions referred to it. In that regard, it is for the Court to extract from all the information provided by the national court, in particular from the grounds of the decision referring the questions, the points of EU law which require interpretation, having regard to the subject matter of the dispute (see, to that effect, judgments of 28 November 2000, Roquette Frères, C‑88/99, EU:C:2000:652, paragraph 18, and of 23 October 2025, Zlakov, C‑744/23, EU:C:2025:816, paragraph 17 and the case-law cited).
36      In the present case, it follows from the order for reference that, in its decision of 25 March 2022 the tax authority found that RRE Tradecenters holding, Esterkin Family Investments, IC Industries Holdings, Outletico and Business Park had to be regarded as being ‘linked enterprises’ within the meaning of the third subparagraph of Article 3(3) of Annex I to Regulation No 651/2014.
37      The referring court, which is called upon to review the legality of that decision, has no doubt that Outletico can be regarded as being a ‘linked’ enterprise, within the meaning of Article 3(3) of Annex I to Regulation No 651/2014, with respect to RRE Tradecenters holding, which owns 60% of its capital, and to Business Park, which it owns fully.
38      That court, in essence, seeks to determine whether Outletico must be regarded as being linked not only to RRE Tradecenters holding and to Business Park, but also, through RRE Tradecenters holding and A, to Esterkin Family Investments and to IC Industries Holdings, since A fully owns RRE Tradecenters holding and Esterkin Family Investments, and holds 75% of the capital of IC Industries Holdings.
39      It follows from the order for reference that, if all the companies referred to in the preceding paragraph were to be regarded as being ‘linked enterprises’, it would not be possible to classify Outletico as an SME. Outletico would then have to be regarded as having been an undertaking in difficulty on 31 December 2019 and it would be required to repay the aid at issue in the main proceedings which, under such circumstances, would have to be considered to be unlawful aid. By contrast, if Outletico were to be regarded as being linked to RRE Tradecenters holdings and Business Park only, it would be possible to classify it as an SME, it would not be classified as an undertaking in difficulty on 31 December 2019 and it would be able to keep the benefit of the aid.
40      In those circumstances, the referring court raises the question of whether, in essence, a natural person with a controlling interest in certain enterprises can be him or herself regarded as being an ‘enterprise’ through which those enterprises have, indirectly, relationships with one another capable of classifying all of those entities as
‘linked enterprises’, within the meaning of the third subparagraph of Article 3(3) of Annex I to Regulation No 651/2014.
41      In the light of those elements, it must be held that, by its two questions, which it is appropriate to examine together, the referring court asks, in essence, whether Article 1 and the third subparagraph of Article 3(3) of Annex I to Regulation No 651/2014 must be interpreted as meaning that a natural person with a controlling interest conferring on him or her the majority of the shareholders’ voting rights in companies engaged in an economic activity must, on that basis alone, be regarded as being him or herself engaged in an economic activity and, therefore, as being an ‘enterprise’, within the meaning of Article 1 of Annex I, through which those companies indirectly have relationships capable of classifying them as ‘linked enterprises’,
within the meaning of the third subparagraph of Article 3(3) of Annex I.
In particular, that court is uncertain if the fact that, under national law, it is for the general meeting to adopt certain decisions connected with the management of the company is sufficient, in itself, to regard a natural person as taking part in the economic activity of that company, without it being necessary to assess whether that natural person actually takes part in the management of the company.
42      As is apparent, in particular, from recital 40 of Regulation No 651/2014, the purpose of which is to declare certain categories of State aid compatible with the internal market pursuant to Articles 107 and 108 TFEU, the Commission exempts certain categories of State aid when they are granted in favour of SMEs on account of the market failures which result in those undertakings having to contend with a number of handicaps which limit their socially and economically desirable development (see, to that effect, judgments of 29 April 2004, Italy v Commission, C‑91/01, EU:C:2004:244, paragraph 46, and of 24 September 2020, NMI Technologietransfer, C‑516/19, EU:C:2020:754, paragraph 31).
43      In accordance with Articles 2 and 3 of Annex I to Regulation No 651/2014, an enterprise may be classified as an SME, within the meaning of that regulation, if it satisfies three tests: number of persons employed, the financial test relating to the annual turnover or the annual balance sheet total, and an independence test (judgment of 24 September 2020, NMI Technologietransfer, C‑516/19, EU:C:2020:754, paragraph 32 and the case-law cited).
44      As regards the latter test, the Court has held that it seeks to ensure that the measures intended for SMEs genuinely benefit the enterprises for which size represents a handicap and not enterprises belonging to a large group which have access to funds and assistance not available to competitors of equal size (judgment of 24 September 2020, NMI Technologietransfer, C‑516/19, EU:C:2020:754, paragraph 33 and the case-law cited).
45      That test is thus intended to gain a better understanding, as is apparent, inter alia, from recital 9 of Recommendation 2003/361, on which, as stated in recital 30 of Regulation No 651/2014, the concept of ‘SME’ is based, of the economic position of SMEs and to remove from that qualification of SMEs groups of enterprises whose economic power may exceed that of genuine SMEs, with a view to ensuring that only those enterprises which really need the advantages accruing to the category of SMEs from the different rules or measures in their favour actually benefit from them (judgment of 24 September 2020, NMI Technologietransfer, C‑516/19, EU:C:2020:754, paragraph 34 and the case-law cited).
46      The concept of ‘SME’ within the meaning of Regulation No 651/2014, in that it leads to the granting of advantages to enterprises falling under it, most often through rules derogating to the general rules, must be interpreted strictly however (judgment of 24 September 2020, NMI Technologietransfer, C‑516/19, EU:C:2020:754, paragraph 65 and the case-law cited).
47      In accordance with point 2 of Article 2 of Regulation No 651/2014, read together with Article 2(1) of Annex I to that regulation, enterprises which employ fewer than 250 persons and which have an annual turnover not exceeding EUR 50 million and/or an annual balance sheet total not exceeding EUR 43 million are categorised as SMEs.
48      For the purpose of calculating staff numbers and financial amounts of enterprises, Articles 3 and 6 of Annex I establish a distinction, inter alia, between ‘autonomous enterprises’ and ‘linked enterprises’. In accordance with Article 6(1) of Annex I, in the case of an autonomous enterprise, the data, including the number of staff, are determined exclusively on the basis of the accounts of that enterprise. By contrast, it follows from the first and third subparagraphs of Article 6(2) that, in the case of an enterprise having linked enterprises, the data of the enterprise in question must be summed to 100% of the data of any enterprise which may be linked directly or indirectly to it, where the data were not already included through consolidation in the accounts.
49      According to point (a) of the first subparagraph of Article 3(3) of Annex I, two enterprises are deemed to be ‘linked’ when one has a majority of the shareholders’ or members’ voting rights in the other.
50      Pursuant to the third subparagraph of that Article 3(3), enterprises having any of the relationships described in the first subparagraph thereof through ‘one or more other enterprises’ are also considered to be linked.
51      In the present case, it follows from the order for reference that Outletico has a relationship with, at least, Esterkin Family Investments and IC Industries Holdings, which corresponds to that described in point (a) of the first subparagraph of Article 3(3) of Annex I to Regulation No 651/2014, through, on the one hand, RRE Tradecenters holding, which holds 60% of Outletico’s capital and, therefore, the majority of voting rights of its members, and through, on the other hand, A, who fully owns RRE Tradecenters holding and Esterkin Family Investments and owns 75% of IC Industries Holdings and, hence, the majority of voting rights of the members of the latter three companies.
52      As for the question whether it is enough for a natural person to have a controlling interest in an undertaking with the rights associated to it under national law in order to conclude that that person engages in an ‘economic activity’ and, therefore, to classify that natural person as an ‘enterprise’, within the meaning of Article 1 of Annex I to Regulation No 651/2014, it should be noted that, according to that Article 1, an enterprise is considered to be any entity engaged in an economic activity, irrespective of its legal form. This includes, in particular, self-employed persons and family businesses engaged in craft or other activities, and partnerships or associations regularly engaged in an economic activity.
53      The Court has repeatedly held that the concept of ‘enterprise’, within the meaning of that Article 1, covers any entity which engages in an activity consisting of offering products or services on a given market, regardless of its legal status or the profit-making nature of the goal it pursues (see, to that effect, judgment of 13 October 2022, Baltijas Starptautiskā Akadēmija and Stockholm School of Economics in Riga, C‑164/21 and C‑318/21, EU:C:2022:785, paragraph 68 and the case-law cited).
54      In that regard, it should be emphasised, in the first place, that a natural person can be regarded as being an ‘enterprise’ if he or she engages in an economic activity. The concept of ‘enterprise’, within the meaning of Article 1 of Annex I to Regulation No 651/2014, extends to ‘any entity …,
irrespective of its legal form’ which engages in an economic activity. That interpretation is, moreover, borne out by the second sentence of that Article 1, according to which ‘self-employed persons and family businesses’ engaged in craft or other activities are regarded as being enterprises.
55      In the second place, it should be borne in mind that an economic activity may be carried out both by an operator directly on the market, and, indirectly, by an entity controlling that operator as part of an economic unit which they together form (see, to that effect, judgment of 10 January 2006, Cassa di Risparmio di Firenze and Others, C‑222/04, EU:C:2006:8, paragraphs 108 to 110).
56      In that regard, the Court held that the mere fact of holding shares, even controlling shareholdings, is insufficient to characterise as economic an activity of the entity holding those shares, when that activity only consists in the exercise of the rights attached to the status of shareholder or member, as well as, if appropriate, in the receipt of dividends, which are merely the fruits of the ownership of an asset (judgment of 10 January 2006, Cassa di Risparmio di Firenze and Others, C‑222/04, EU:C:2006:8, paragraph 111).
57      By contrast, an entity which, owning controlling shareholdings in a company, actually exercises the control that those shareholdings confer on it by involving itself directly or indirectly in the management thereof must be regarded as taking part in the economic activity carried on by the controlled undertaking. It must therefore itself be regarded as an undertaking (judgment of 10 January 2006, Cassa di Risparmio di Firenze and Others, C‑222/04, EU:C:2006:8, paragraphs 112 and 113).
58      It follows from the case-law recalled in paragraphs 53 and 55 to 57 of the present judgment that an entity, including a natural person, holding shares in a company, can be classified as an ‘enterprise’ only if two conditions are satisfied. First, the shares held must allow that entity to exercise control over a company. Second, that entity must actually exercise that control by involving itself directly or indirectly in the management of that company (see, to that effect, judgment of 10 January 2006, Cassa di Risparmio di Firenze and Others, C‑222/04, EU:C:2006:8, paragraph 118).
59      It follows that the mere fact of holding a majority interest in such a company, or even fully owning its capital, does not, in itself, allow the inference that actual control is exercised. It must be established individually, in practical terms, whether that is indeed the case, on the basis of evidence capable of showing that the entity concerned involves itself, directly or indirectly, in the management of that company.
60      The holding of shares of the types described, in particular on the part of natural persons, in companies which engage in an economic activity often constitute a mere exercise of ownership rights over property, in particular, when they result from a simple placing of capital by an investor (see, to that effect, judgment of 10 January 2006, Cassa di Risparmio di Firenze and Others, C‑222/04, EU:C:2006:8, paragraphs 111 and 117).
61      In that regard, the fact that Latvian law confers on any entity holding shares in the capital of a company certain rights that attach to the status of shareholder, such as voting rights and rights to take part in the general meeting, which is responsible for adopting certain decisions pertaining to the management of the company, does not in itself imply that any entity holding shares exercises actual control on that company by involving itself, directly or indirectly, in the management thereof. Those rights, in fact, arise by operation of law from owning capital or being a shareholder and therefore are not sufficient, in themselves, to draw a distinction between a situation where a natural person engages in an economic activity, consisting in actually controlling a company by involving him or herself directly or indirectly in its management, and a situation where, by holding those shares, a natural person is merely exercising ownership rights over property, in particular when they result from a simple placing of capital by an investor.
62      By contrast, as the Belgian Government noted, in essence, in its written observations, other evidence, such as whether the person with a controlling interest exercises functions within the company’s supervisory bodies or the board of directors, whether that person is an entrepreneur with a controlling interest in a number of companies acting in a coordinated manner or pursuing a common goal or whether that person has declared an intention to put in place a commercial strategy through the controlled company, can be taken into account in order to verify whether that person involves him or herself directly or indirectly in the management of an enterprise and, therefore, exercises actual control on its activity.
63      In the present case, it is evident that the referring court is called upon to verify the legality of the tax authority’s decision of 25 March 2022, which is based, according to the order for reference, solely on the fact that A has a controlling interest in RRE Tradecenters holding, Esterkin Family Investments and IC Industries Holdings, which it is for the referring court to verify.
64      It follows from the foregoing that the mere fact that A has a controlling interest in those companies, with the rights arising from it under Latvian law,
is not sufficient, in itself, to conclude that that natural person exercises actual control by involving himself, directly or indirectly, in the management of those companies and that that person, as a result, engages in an economic activity capable of classifying him as an ‘enterprise’ within the meaning of Article 1 of Annex I to Regulation No 651/2014. Therefore, it cannot be inferred from that alone that Outletico has indirect relationships, through A, with Esterkin Family Investments and IC Industries Holdings capable of classifying those three companies as ‘linked enterprises’ within the meaning of the third subparagraph of Article 3(3) of Annex I.
65      In those circumstances, it is for the referring court to verify whether, in the case in the main proceedings, evidence such as that indicated in paragraph 62 of the present judgment can be taken into account in order to determine whether A is involving himself, directly or indirectly, in the management of those companies and, therefore, exercises actual control over their activities. If so, A himself could be classified as an ‘enterprise’,
within the meaning of Article 1 of Annex I to Regulation No 651/2014,
through which Outletico indirectly has relationships with Esterkin Family Investments and IC Industries Holdings capable of classifying those companies as ‘linked enterprises’ within the meaning of the third subparagraph of Article 3(3) of Annex I.
66      Should the referring court take the view that
A cannot be classified as an ‘enterprise’ but must, for the purposes of applying the concept of ‘linked enterprises’, be regarded as being a natural person, it will be for that court to establish whether the conditions set out in the fourth subparagraph of Article 3(3) of Annex I to Regulation No 651/2014 are met, in particular the condition that the enterprises concerned must engage in their activity or in part of their activity in the same relevant market or in adjacent markets.
67      In the light of all the foregoing considerations, the answer to the questions referred is that Article 1 and the third subparagraph of Article 3(3) of Annex I to Regulation No 651/2014 must be interpreted as meaning that:
–        a natural person with a controlling interest conferring on him or her the majority of the shareholders’ voting rights in companies engaged in an economic activity cannot, on that basis alone, be regarded as being him or herself engaged in an economic activity and, therefore, as being an ‘enterprise’,
within the meaning of Article 1 of Annex I,
through which those companies indirectly have relationships capable of classifying them as ‘linked enterprises’,
within the meaning of the third subparagraph of Article 3(3) of Annex I;
–        such a natural person can only be classified as an ‘enterprise’ for those purposes if he or she actually exercises the control that attaches to that interest by directly or indirectly involving him or herself in the management of the companies concerned, in such a way as to take part in the economic activity those companies engage in;
–        the mere fact of having a controlling interest, with the rights attached to it pursuant to the articles of association for any shareholder under national law, is not sufficient, in itself, for a finding that actual control is exercised.
Costs
68      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 (Ninth Chamber) hereby rules:
Article 1 and the third subparagraph of Article 3(3) of Annex I to Commission Regulation (EU) No 651/2014 of 17 June 2014 declaring certain categories of aid compatible with the internal market in application of Articles 107 and 108 [TFEU], as amended by Commission Regulation (EU) 2020/972 of 2 July 2020,
must be interpreted as meaning that:
–        a natural person with a controlling interest conferring on him or her the majority of the shareholders’ voting rights in companies engaged in an economic activity cannot, on that basis alone, be regarded as being him or herself engaged in an economic activity and, therefore, as being an ‘enterprise’, within the meaning of Article 1 of Annex I, through which those companies indirectly have relationships capable of classifying them as ‘linked enterprises’, within the meaning of the third subparagraph of Article 3(3) of Annex I;
–        such a natural person can only be classified as an ‘enterprise’ for those purposes if he or she actually exercises the control that attaches to that interest by directly or indirectly involving him or herself in the management of the companies concerned, in such a way as to take part in the economic activity those companies engage in;
–        the mere fact of having a controlling interest, with the rights attached to it pursuant to the articles of association for any shareholder under national law, is not sufficient, in itself, for a finding that actual control is exercised.
[Signatures]
*      Language of the case: Latvian.