Preliminary ruling procedure before the CJEU on real estate transfer tax regarding merger-related absorption

In the area of real estate transfer tax (RETT) the following developments in Austria are currently accelerating rapidly: In response to the swift reaction of the Austrian Ministry of Finance to the ECJ case Nova Iberomoldes issued on 29 July 2026, a further development has now followed (see our newsletter dated 6 August 2026). The Austrian Supreme Administrative Court (VwGH) presents questions to the CJEU on the interpretation of the Directive on Raising Capital. The VwGH has brought a highly relevant question for restructurings to Luxemburg with its preliminary ruling request. The CJEU will now have to clarify if a merger-related absorption of a partnership involving the transfer of ownership of the real estate itself may be subject to Austrian RETT or whether EU law imposes limits in this respect.

Underlying case

The procedure is based on the following group restructuring:

Two corporations held interest in a real estate-owning Austrian partnership. Due to the side-stream merger of the two corporations, the partnership was dissolved and its total assets, including the real estate, were transferred to the acquiring corporation by way of an absorption (similar to an up-stream merger).

Request for a preliminary ruling by the VwGH 

It is questionable for the VwGH whether Austrian RETT on a transfer resulting from the merger-related absorption is compatible with the Directive on Raising Capital (Regulation 2008/7/EC). Therefore, the VwGH suspended the procedure with resolution dated 3 September 2026 and presented to the CJEU two questions for a preliminary ruling (published on 2 October 2026).

• On the one hand, it is questionable whether an asset-managing partnership follows a profit-making purpose and qualifies as a corporation within the meaning of the Directive on Raising Capital.

• On the other hand, the CJEU is to clarify whether RETT violates the Directive on Raising Capital in the case of an absorption or is compliant with EU law as a tax on the transfer of ownership. Due to the absorption, legal ownership of the real estate itself is transferred, which significantly distinguishes the case from the case Nova Iberomoldes.

Takeaway for practice

The decision of the CJEU can have significant effects on Austrian RETT.

• In particular, it will have to be clarified which legal forms are protected by the Directive on Raising Capital. From our perspective, there are strong arguments, based on the definition of corporations in the directive, that (asset-managing) partnerships fall under the scope of the directive.
• The decision of the CJEU is eagerly awaited as to whether the absorption is to be regarded as restructuring within the meaning of the Directive on Raising Capital. However, from our perspective, there are arguments that, due to the transfer of legal ownership of the real estate, RETT on absorptions constitutes a tax on the transfer of ownership and is compliant with EU law.
• It is worth for companies with existing or planned real estate and restructuring structures to monitor further developments closely.
  • In outdated cases it is to be verified to what extent a reclaim of RETT would still be possible from a procedural law perspective.
  • For new cases, it is to be analysed whether the planned restructuring or contribution in connection with real estate-owning companies or businesses is covered by the scope of the Directive on Raising Capital. If necessary, a tax declaration with a disclosure letter referring to the preliminary ruling procedure is to be submitted to the Austrian tax office.