This article examines
the tax treatment of foreign and domestic investment funds in the European
Union in light of the Court of Justice’s recent decision in F SA (C-18/23). The
judgment addresses under which circumstances a foreign investment fund must be
considered comparable to a domestic fund in order to qualify for corporate
income tax regimes tailored for investment funds. The Court of Justice ruled
that foreign investment funds cannot be excluded from tax benefits solely due
to differences arising from commercial law. The article argues that
comparability should be assessed based on the purpose of the tax exemption,
which should not be confused with the purpose of the commercial law regulating
investment funds. The purpose of the tax exemptions and benefits is the
prevention of double taxation and the treatment of collective investments as
direct investments. From that perspective, commercial law requirements may not
be decisive. Drawing comparisons with other recent Court of Justice's judgments
(e.g., in the cases UBS Real Estate, A SCPI, Franklin Mutual, and Deka), the
author identifies a consistent judicial approach that should loosen the
comparability requirement previously applied by Member States. The article
further reflects on the potential implications for investment funds based in
the EU and in third-countries, as well as the limits of national justifications
based on investor protection or prevention of systemic risks. Ultimately, the
case law of the Court of Justice underlines a more inclusive and factual
interpretation of comparability in the internal market.