CJEU Ruling on Share Deals: Implications for Austrian Real Estate Transfer Tax

Aug 13

4 min read

In its judgment of 4 June 2026 (Case C-837/24 – Nova Iberomoldes), the Court of Justice of the European Union (CJEU) handed down a landmark decision concerning real estate transfer tax. Although the proceedings concerned Portuguese legislation, the implications extend well beyond Portugal. The judgment is also highly relevant for Austria, as the Austrian Real Estate Transfer Tax Act contains comparable provisions.

What was the Nova Iberomoldes case about?

The case arose in connection with the incorporation of a Portuguese public limited company. Rather than being contributed in cash, the company’s share capital was provided by way of contributions of shares in several companies. One of those companies owned real estate in Portugal.

Under Portuguese law, the acquisition of at least 75% of the shares in a company owning real estate triggers real estate transfer tax. The Portuguese tax authorities therefore treated the contribution of the shares as equivalent to an acquisition of real estate and assessed real estate transfer tax accordingly.

The company concerned challenged this treatment, arguing that the transaction did not constitute an acquisition of real estate but rather a corporate restructuring. Such transactions, it argued, are exempt from indirect taxes under Council Directive 2008/7/EC concerning indirect taxes on the raising of capital (the “Capital Duty Directive”).

The CJEU’s decision

The CJEU agreed with this line of argument. In the Court’s view, the contribution of shares in exchange for the issuance of shares constitutes a restructuring operation within the meaning of the Capital Duty Directive. Pursuant to Article 5(1)(e) of the Directive, such restructuring operations may, as a general rule, not be subject to indirect taxation.

Of particular significance is the CJEU’s clarification that real estate transfer tax may also constitute such a prohibited indirect tax. In this context, it is irrelevant whether the tax base is determined by reference to the value of the real estate or the value of the shares transferred.

The Court further clarified that the exceptions provided for in the Directive do not apply. Those exceptions relate exclusively to cases involving the transfer of real estate itself. In a share deal, however, ownership of the real estate remains with the company; only the shares in that company are transferred.

Implications for Austrian real estate transfer tax

The decision is particularly relevant for Austria, as the 2025 Budget Accompanying Act significantly expanded the scope of real estate transfer tax applicable to share deals.

Since 1 July 2025, real estate transfer tax applies more extensively, in particular, to:

concentrations of shares reaching a participation threshold of 75%;
direct and indirect acquisitions of shares;
changes in a company’s shareholder structure; and
numerous real estate companies.

In the context of corporate restructurings, this raises the important question of whether such taxation under Austrian domestic law is compatible with EU law.

Austrian Ministry of Finance adopts the CJEU’s position

In its recent guidance, the Austrian Federal Ministry of Finance (BMF) confirms that, due to the primacy of EU law, the CJEU judgment must also be applied directly in Austria. According to the BMF, the following transactions may qualify as privileged restructuring operations within the meaning of the Capital Duty Directive:

contributions of shares in corporations owning real estate in exchange for the issuance of shares;
downstream and sidestream contributions;
demergers involving interests in companies owning real estate;
certain mergers;
intra-group diagonal restructurings between different levels of participation; and
comparable restructurings falling outside the scope of the Austrian Reorganisation Tax Act (Umgründungssteuergesetz).

A key requirement is that the acquiring company issues shares as consideration and that the relevant conditions under the Capital Duty Directive are satisfied. The judgment may therefore have considerable practical significance for Austrian corporations such as limited liability companies (GmbHs), stock corporations (AGs) and European Companies (SEs).

What are the practical implications?

The BMF takes the view that restructuring operations clearly falling within the scope of the CJEU’s judgment will no longer trigger real estate transfer tax. In such cases, it may even be possible to dispense with a self-assessment or tax return.

For other transactions or legal forms, however, a degree of legal uncertainty remains. It is therefore still necessary to carefully assess whether real estate transfer tax applies in each individual case.

For ongoing or planned transactions, a comprehensive tax analysis is therefore advisable. Depending on the circumstances, it may also be appropriate to disclose the transaction to the tax authorities and, where the relevant requirements are met, submit an appropriate declaration referring to the CJEU’s case law.

Real estate transfer tax already paid may be reviewed

Restructuring transactions that have already been completed should also be reassessed in light of the judgment.

Where real estate transfer tax was paid by way of self-assessment and the transaction falls within the scope of the Capital Duty Directive under the new case law, an application for the assessment or non-assessment of the tax pursuant to Section 201 of the Austrian Federal Fiscal Code (Bundesabgabenordnung – BAO) may be filed within the applicable statutory time limits.

Where a tax assessment notice has already been issued, the available remedies may, depending on the circumstances of the individual case, include an appeal or an application for cancellation of the assessment pursuant to Section 299 BAO.

If you have any questions, our experts Irene Grass and Martin Schmidt will be happy to assist you.