E. sp. z o.o. v Prezydent Miasta Mielca (C-453/23)

Contents

Judgment of the Court (Grand Chamber)29 April 2025^note(Reference for a preliminary ruling — Aid granted by a Member State — Article 107(1) TFEU — Concept of ‘State aid’ — Selectivity of a tax measure — Criteria for assessment — Determination of the reference framework — Property tax — Exemption for land, buildings and structures forming part of railway infrastructure)In Case C‑453/23,REQUEST for a preliminary ruling under Article 267 TFEU from the Naczelny Sąd Administracyjny (Supreme Administrative Court, Poland), made by decision of 19 April 2023, received at the Court on 19 July 2023, in the proceedingsE. sp. z o.o.vPrezydent Miasta Mielca,with the participation of:Rzecznik Małych i Średnich Przedsiębiorców,THE COURT (Grand Chamber),composed of K. Lenaerts, President, T. von Danwitz, Vice-President, F. Biltgen, K. Jürimäe, C. Lycourgos (Rapporteur), M.L. Arastey Sahún, S. Rodin, D. Gratsias and M. Gavalec, Presidents of Chambers, E. Regan, I. Ziemele, J. Passer and Z. Csehi, Judges,Advocate General: J. Kokott,Registrar: M. Siekierzyńska, Administrator,having regard to the written procedure and further to the hearing on 8 July 2024,after considering the observations submitted on behalf of:– E. sp. z o.o., by M. Dziedzic, radca prawny, and R. Kran, doradca podatkowy,– the Prezydent Miasta Mielca, by A. Dowgier, adwokat, and J. Grabiec, radca prawny,– the Rzecznik Małych i Średnich Przedsiębiorców, by P. Chrupek, radca prawny,– the Polish Government, by B. Majczyna, A. Kramarczyk–Szaładzińska and M. Rzotkiewicz, acting as Agents,– the Spanish Government, by M. Morales Puerta, acting as Agent,– the European Commission, by I. Barcew, C.-M. Carrega and F. Tomat, acting as Agents,after hearing the Opinion of the Advocate General at the sitting on 17 October 2024,gives the following

Judgment

1This request for a preliminary ruling concerns the interpretation of Article 107(1) TFEU and Article 108(3) TFEU, read in conjunction with Article 2 of Council Regulation (EU) 2015/1589 of 13 July 2015 laying down detailed rules for the application of Article 108 [TFEU] (OJ 2015 L 248, p. 9).

2The request has been made in proceedings between E. sp. z o.o. (‘Company E’) and the Prezydent Miasta Mielca (Mayor of the Town of Mielec, Poland) (‘the Mayor of Mielec’) concerning the refusal of the latter to grant the former a tax exemption in relation to property tax.

Legal context

European Union law

The FEU Treaty

3Article 107(1) TFEU provides:‘Save as otherwise provided in the Treaties, any aid granted by a Member State or through State resources in any form whatsoever which distorts or threatens to distort competition by favouring certain undertakings or the production of certain goods shall, in so far as it affects trade between Member States, be incompatible with the internal market.’

4Under Article 108(3) TFEU:‘The [European] Commission shall be informed, in sufficient time to enable it to submit its comments, of any plans to grant or alter aid. If it considers that any such plan is not compatible with the internal market having regard to Article 107 [TFEU], it shall without delay initiate the procedure provided for in [Article 108(2) TFEU]. The Member State concerned shall not put its proposed measures into effect until this procedure has resulted in a final decision.’

Directive 2012/34/EU

5Article 1 of Directive 2012/34/EU of the European Parliament and of the Council of 21 November 2012 establishing a single European railway area (OJ 2012 L 343, p. 32), entitled ‘Subject matter and scope’, provides:1.This Directive lays down:(a) the rules applicable to the management of railway infrastructure and to rail transport activities of the railway undertakings established or to be established in a Member State as set out in Chapter II;(b) the criteria applicable to the issuing, renewal or amendment of licences by a Member State intended for railway undertakings which are or will be established in the [European] Union as set out in Chapter III;(c) the principles and procedures applicable to the setting and collecting of railway infrastructure charges and the allocation of railway infrastructure capacity as set out in Chapter IV.2. This Directive applies to the use of railway infrastructure for domestic and international rail services.’

6Article 3(3) of that directive defines the concept of ‘railway infrastructure’ as being the items listed in Annex I thereto. That annex contains the list of items of which railway infrastructure consists, ‘provided they form part of the permanent way, including sidings, but excluding lines situated within railway repair workshops, depots or locomotive sheds, and private branch lines or sidings’.

Regulation 2015/1589

7Article 2(1) of Regulation 2015/1589 provides:‘Save as otherwise provided in regulations made pursuant to Article 109 TFEU or to other relevant provisions thereof, any plans to grant new aid shall be notified to the Commission in sufficient time by the Member State concerned. The Commission shall inform the Member State concerned without delay of the receipt of a notification.’

Polish law

8Article 2(1) and (2) of the ustawa o podatkach i opłatach lokalnych (Law on local taxes and charges) of 12 January 1991 (Dziennik Ustaw of 2019, item 1170), in the version applicable to the dispute in the main proceedings (‘the Law on local taxes and charges’), provides:1.The following immovable property or construction works shall be subject to property tax:(1) land;(2) buildings or parts thereof;(3) structures, or parts thereof, which are connected with carrying on an economic activity.2. Agricultural areas and forests, with the exception of those used for carrying on an economic activity, shall not be subject to property tax.’

9According to Article 2(3)(4) of that law, land used for road lanes of public roads, with the exception of land connected with carrying on an economic activity other than maintaining public roads or operating toll motorways, is exempt from property tax.

10Article 4 of that law provides:1.The taxable amount shall be:(1) for land, the surface area;(2) for buildings or parts thereof, the usable floor area;(3) for structures, or parts thereof, which are connected with carrying on an economic activity, subject to paragraphs 4 to 6, the value referred to in the provisions on income tax, established on 1 January of the fiscal year and constituting the basis for calculating depreciation in that year, with no depreciation charges deducted, and, in the case of structures which have fully depreciated, their value on 1 January of the year in which the most recent depreciation charge was made.…’

11Article 7(1)(1)(a) of that law provided:‘The following shall be exempt from property tax:(1) land, buildings and structures forming part of railway infrastructure within the meaning of the provisions relating to rail transport which(a) are made available to rail carriers’.

12Article 6(2) of the ustawa o postępowaniu w sprawach dotyczących pomocy publicznej (Law on the procedure in cases concerning State aid) of 30 April 2004 (Dziennik Ustaw of 2023, item 702) provides:‘State aid provided for in a legislative act which makes acquisition of the right to receive aid subject only to fulfilment of the criteria set out in that act, without there being a need for the issuing of a decision or the conclusion of a contract, or where the decision issued merely confirms the acquisition of that right, may be granted if the legislative act is an aid scheme approved by the Commission in accordance with Article 108 TFEU or providing for the grant of aid which is not subject to the notification obligation.’

The dispute in the main proceedings and the questions referred for a preliminary ruling

13Company E is the owner of an individual railway siding situated on land belonging to that company. It is also the owner of a part of that siding’s infrastructure. During 2021, the company expressed its intention to make that siding available to a rail carrier, which would carry out transport operations on behalf of that company.

14Company E was of the view that, from the date of making that siding available to that carrier, it would be able to avail itself of the exemption from property tax provided for in Article 7(1)(1)(a) of the Law on local taxes and charges in respect of the entirety of that land, as well as in respect of land which it was planning to acquire and which is also, in part, equipped with an individual railway siding. In those circumstances, it applied to the Mayor of Mielec for an advance tax ruling confirming that, from that date, it would be able to avail itself of that exemption.

15By an advance tax ruling of 14 June 2021, the Mayor of Mielec ruled out the possibility of Company E availing itself of that exemption. He indicated that, although the company satisfies, from a formal point of view, the conditions set out in Article 7(1)(1)(a) of the Law on local taxes and charges, it could not avail itself of the exemption provided for therein, as this would have the effect of granting that company State aid which has not been subject to the Commission’s preliminary examination procedure.

16Company E then brought an action against that advance tax ruling before the Wojewódzki Sąd Administracyjny w Rzeszowie (Regional Administrative Court, Rzeszów, Poland), which dismissed that action by a judgment of 19 October 2021. That court confirmed the position adopted by the Mayor of Mielec, inasmuch as he had classified that exemption as ‘State aid’, and found that that aid had not been notified to the Commission, in breach of Article 108(3) TFEU and Article 2 of Regulation 2015/1589.

17The company then brought an appeal on a point of law against that judgment before the Naczelny Sąd Administracyjny (Supreme Administrative Court, Poland), which is the referring court.

18The referring court explains that Article 7(1)(1)(a) of the Law on local taxes and charges extended the exemption from property tax to include individual railway sidings, in particular those constituting ‘private’ infrastructure, which are located in, inter alia, mines, production facilities or power stations and which form part of the overall rail freight transport system. Such sidings, as well as the buildings forming part of their infrastructure, are eligible for that exemption, provided that they are made available to a railway undertaking. In that regard, that court indicates that the Polish legislature has provided for a mechanism to encourage undertakings to restore disused sidings and to make effective use of rail transport, which does not entail pollutant emissions and provides greater safety.

19It considers that, even if, because it is of a general nature, the exemption refers, in principle, to an unlimited group of beneficiaries, there are still doubts as regards the criterion used in Article 7(1)(1)(a) of the Law on local taxes and charges, according to which the economic entity concerned must have a certain type of infrastructure at its disposal, which, in practice, benefits undertakings operating in certain sectors, namely – inter alia – undertakings operating mines, thermal power stations or breweries. The application of such a criterion, although that criterion is – prima facie – objective in nature, could thus give rise to ‘covert’ selectivity.

20In addition, the referring court specifies that property tax is not harmonised at EU level, with the Member States thus retaining the freedom to determine both their fiscal policy and the way in which the rates of that tax are fixed. In the Polish legal system, property tax concerns land other than agricultural and forestry land, buildings or parts thereof, and structures or parts thereof connected with the exercise of an economic activity. In this instance, it is necessary to ascertain not whether the exemption from property tax provided for in Article 7(1)(1)(a) of the Law on local taxes and charges is compatible with EU law, but whether application of that exemption is permitted in so far as it has not been notified to the Commission in accordance with Article 108(3) TFEU, the direct effect of which is recalled by the referring court.

21Lastly, that court questions whether, in the event that the exemption has been applied in breach of the notification obligation laid down in Article 108(3) TFEU, an undertaking which has benefited from that exemption is required to repay the aid unlawfully received, together with interest, or whether the principle of the protection of legitimate expectations precludes such repayment. In that regard, it indicates that it was only after having applied the exemption at issue for four years that the Polish tax authorities started refusing to grant that exemption, claiming a failure to fulfil that obligation.

22In those circumstances the Naczelny Sąd Administracyjny (Supreme Administrative Court) decided to stay the proceedings and to refer the following questions to the Court of Justice for a preliminary ruling:(1) In the light of Article 107(1) [TFEU], does the grant by a Member State of tax relief addressed to all operators, such as that provided for in Article 7(1)(1)(a) of [the Law on local taxes and charges], consisting in an exemption from tax on immovable property for land, buildings and structures forming part of railway infrastructure within the meaning of the provisions on rail transport, which is made available to rail-transport operators, distort or threaten to distort competition?(2) If the answer to Question 1 is in the affirmative, is an operator which has availed itself of the tax exemption pursuant to the abovementioned provision of national law, introduced without following the required procedure, as laid down in Article 108(3) [TFEU], [read] in conjunction with Article 2 of [Regulation 2015/1589], required to pay the outstanding tax, plus interest?’

Consideration of the questions referred

Admissibility

23The Spanish Government submits that the request for a preliminary ruling is inadmissible. The tax exemption provided for in Article 7(1)(1)(a) of the Law on local taxes and charges covers land, buildings and structures ‘forming part of railway infrastructure’. However, according to the definition of the concept of ‘railway infrastructure’ set out in Article 3(3) of Directive 2012/34, read in conjunction with Annex I thereto, individual sidings are not covered by that concept. Consequently, Company E, which owns only an individual siding on its land, is not entitled to benefit from that exemption. In those circumstances, the questions submitted to the Court are irrelevant for the purpose of resolving the dispute in the main proceedings.

24Furthermore, the Polish Government and the Commission submit that the second question is inadmissible. It is apparent from the request for a preliminary ruling that Company E did not benefit from that exemption. Thus, an answer to the question whether an undertaking which has benefited from such an exemption is required to repay the amount of the property tax from which it has been exempted, together with the interest relating thereto, would have no effect on the outcome of the dispute in the main proceedings.

25It should be borne in mind in that regard that, according to settled case-law, in the context of the cooperation between the Court and the national courts provided for in Article 267 TFEU, it is solely for the national court before which a dispute has been brought, and which must assume responsibility for the subsequent judicial decision, to determine, in the light of the particular circumstances of the case, both the need for a preliminary ruling in order to enable it to deliver judgment and the relevance of the questions which it submits to the Court. Consequently, where the questions submitted by the national court concern the interpretation of EU law, the Court is, in principle, bound to give a ruling (judgment of 4 October 2024, Bezirkshauptmannschaft Landeck (Attempt to access personal data stored on a mobile telephone), C‑548/21, EU:C:2024:830, paragraph 46 and the case-law cited).

26It follows that questions relating to EU law enjoy a presumption of relevance. The Court may refuse to rule on a question referred by a national court for a preliminary ruling only where it is quite obvious that the interpretation of EU law that is sought bears no relation to the actual facts of the main action or its purpose, where the problem is hypothetical, or where the Court does not have before it the factual or legal material necessary to give a useful answer to the questions submitted to it (see, to that effect, judgment of 4 October 2024, Bezirkshauptmannschaft Landeck (Attempt to access personal data stored on a mobile telephone), C‑548/21, EU:C:2024:830, paragraph 47 and the case-law cited).

27In this instance, the first question concerns the interpretation of Article 107(1) TFEU in proceedings between Company E and the Mayor of Mielec concerning the refusal of the latter to allow the former to benefit from the tax exemption provided for in Article 7(1)(1)(a) of the Law on local taxes and charges, on the ground that the grant of that exemption would constitute unlawful State aid, as it had not been notified to the Commission pursuant to Article 108(3) TFEU. It thus appears that that interpretation bears some relation to the purpose of those proceedings and that it is intended to resolve a problem that is not hypothetical. In addition, the Court has before it the factual and legal material necessary to give a useful answer to that first question.

28Furthermore, it should be noted that, pursuant to Article 1(1) of Directive 2012/34, that directive lays down, inter alia, the rules applicable to the management of railway infrastructure and the criteria applicable to the issuing, renewal or amendment, by a Member State, of licences intended for railway undertakings, as well as the principles and procedures applicable to the setting and collecting of railway infrastructure charges and the allocation of railway infrastructure capacity. According to Article 1(2) thereof, Directive 2012/34 applies to the use of railway infrastructure for domestic and international rail services.

29It follows that that directive manifestly does not apply in a dispute such as the one in the main proceedings, which concerns the possible classification as ‘State aid’, for the purposes of Article 107(1) TFEU, of a national tax measure providing for an exemption from property tax.

30It is therefore irrelevant that, for the purpose of applying Directive 2012/34, Annex I thereto excludes individual sidings from the concept of ‘railway infrastructure’ as referred to in Article 3(3) thereof.

31It follows from the foregoing that the first question is admissible.

32The second question concerns the obligations incumbent on an undertaking which has benefited from the tax exemption provided for in Article 7(1)(1)(a) of the Law on local taxes and charges, in a situation where that exemption comprises elements of State aid for the purposes of Article 107(1) TFEU, on the ground that it was granted without the notification obligation laid down in Article 108(3) TFEU, read in conjunction with Article 2 of Regulation 2015/1589, having been fulfilled.

33In that regard, it should be noted that, as is indicated by the Polish Government and by the Commission, it is apparent from the request for a preliminary ruling that Company E did not benefit from that exemption.

34It follows from settled case-law that it is not the Court’s task to deliver advisory opinions on general or hypothetical questions (judgment of 20 October 2022, Staatssecretaris van Justitie en Veiligheid (Removal of a victim of trafficking in human beings), C‑66/21, EU:C:2022:809, paragraph 82 and the case-law cited).

35Consequently, the second question is inadmissible.

The first question

36As a preliminary point, it should be borne in mind, in the first place, that it follows from the settled case-law of the Court that a measure may be classified as ‘State aid’ for the purposes of Article 107(1) TFEU only in so far as all the following conditions are satisfied. First, there must be an intervention by the State or through State resources. Second, that intervention must be liable to affect trade between Member States. Third, it must confer a selective advantage on the beneficiary. Fourth, it must distort or threaten to distort competition (see, inter alia, judgment of 7 March 2024, Fallimento Esperia and GSE, C‑558/22, EU:C:2024:209, paragraph 62 and the case-law cited).

37In this instance, it should be noted that the first question, as formulated by the referring court, concerns the interpretation of the concept of ‘State aid’ for the purposes of Article 107(1) TFEU solely in the light of the condition, laid down in that provision, requiring that the measure in question distort or threaten to distort competition. That being said, it is clear from the grounds of the request for a preliminary ruling that that court also has doubts as regards the condition, laid down in that provision, that that measure confer a selective advantage on its beneficiaries, inasmuch as it would favour certain undertakings or the production of certain goods.

38Under the procedure laid down by Article 267 TFEU, which provides 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 (judgment of 4 October 2024, Bezirkshauptmannschaft Landeck (Attempt to access personal data stored on a mobile telephone), C‑548/21, EU:C:2024:830, paragraph 60 and the case-law cited).

39In that regard, the Court must extract from all the information provided by the national court, in particular from the grounds of the order for reference, the points of EU law which require interpretation, having regard to the subject matter of the dispute (see, to that effect, judgment of 4 October 2024, Bezirkshauptmannschaft Landeck (Attempt to access personal data stored on a mobile telephone), C‑548/21, EU:C:2024:830, paragraph 61 and the case-law cited).

40Thus, it must be held that, by its first question, the referring court asks, in essence, whether Article 107(1) TFEU is to be interpreted as meaning that a piece of Member State legislation which exempts from property tax the land, buildings and structures forming part of railway infrastructure where that infrastructure is made available to rail carriers confers a selective advantage on the beneficiaries of that exemption and distorts or threatens to distort competition.

41In the second place, it should be borne in mind, first, that action by Member States in areas, such as the area of direct taxation, that are not subject to harmonisation by EU law is not excluded from the scope of the provisions of the FEU Treaty on monitoring State aid. The Member States must thus refrain from adopting any tax measure liable to constitute State aid that is incompatible with the internal market (see, to that effect, judgment of 10 September 2024, Commission v Ireland and Others, C‑465/20 P, EU:C:2024:724, paragraph 73 and the case-law cited).

42Second, it is apparent from the documents before the Court that Article 7(1)(1)(a) of the Law on local taxes and charges defines the beneficiaries of the exemption at issue in the main proceedings, which those beneficiaries may be granted solely on the basis of that legislative provision, in a general and abstract way. In those circumstances, it is for the referring court to determine whether, because of the arrangements provided for under the exemption at issue in the main proceedings, that exemption gives its beneficiaries an appreciable advantage in relation to their competitors and is likely to benefit in particular undertakings engaged in trade between Member States (see, to that effect, judgments of 14 October 1987, Germany v Commission, 248/84, EU:C:1987:437, paragraph 18, and of 16 September 2021, Commission v Belgium and Magnetrol International, C‑337/19 P, EU:C:2021:741, paragraph 77).

The condition relating to the selective advantage

43In order to determine whether a national measure is capable of conferring a selective advantage for the purposes of Article 107(1) TFEU, it is necessary to examine whether, under a particular legal regime, that measure is such as to favour ‘certain undertakings or the production of certain goods’ over other undertakings which, in the light of the objective pursued by that regime, are in a comparable factual and legal situation and which accordingly suffer different treatment that can, in essence, be classified as discriminatory (judgment of 10 September 2024, Commission v Ireland and Others, C‑465/20 P, EU:C:2024:724, paragraph 75 and the case-law cited).

44Accordingly, in order to classify a tax measure such as the one at issue in the main proceedings as ‘selective’, it is necessary to identify, initially, the reference framework, that is to say, the ‘normal’ tax regime applicable in the Member State concerned, and to demonstrate, thereafter, that the tax measure at issue is a derogation from that reference framework, in so far as it differentiates between operators who, in the light of the objective pursued by that reference framework, are in a comparable factual and legal situation. The concept of ‘State aid’ does not, however, cover measures that differentiate between undertakings which, in the light of the objective pursued by the legal regime concerned, are in a comparable factual and legal situation, and that are, therefore, a priori selective, where the Member State concerned is able to demonstrate, subsequently, that that differentiation is justified, in the sense that it flows from the nature or general structure of the system of which those measures form part (see, to that effect, judgments of 19 December 2018, A-Brauerei, C‑374/17, EU:C:2018:1024, paragraphs 36 and 44, and of 10 September 2024, Commission v Ireland and Others, C‑465/20 P, EU:C:2024:724, paragraph 76 and the case-law cited).

45In that context, the determination of the reference framework is of particular importance in the case of tax measures, because the existence of an economic advantage for the purposes of Article 107(1) TFEU may be established only when compared with ‘normal’ taxation (judgment of 10 September 2024, Commission v Ireland and Others, C‑465/20 P, EU:C:2024:724, paragraph 77 and the case-law cited).

46In that regard, it must be emphasised that the determination of the reference framework must follow from an objective examination of the content, the structure and the specific effects of the applicable rules under the law of that State. The selectivity of a tax measure cannot be assessed in the light of a reference framework consisting of some provisions of the law of the Member State concerned that have been artificially taken from a broader legislative framework (see, to that effect, judgment of 6 October 2021, Banco Santander and Others v Commission, C‑53/19 P and C‑65/19 P, EU:C:2021:795, paragraph 62 and the case-law cited).

47Consequently, where the tax measure in question is inseparable from the general tax system of the Member State concerned, reference must be made to that system. On the other hand, where it appears that such a measure is clearly severable from that general system, it cannot be ruled out that the reference framework to be taken into account may be more limited than the general system concerned, or even that it may equate to the measure itself, where the latter appears as a rule having its own legal logic and it is not possible to identify a consistent body of rules external to that measure (judgment of 6 October 2021, Banco Santander and Others v Commission, C‑53/19 P and C‑65/19 P, EU:C:2021:795, paragraph 63 and the case-law cited).

48In addition, it should be borne in mind that, outside the spheres in which EU tax law has been harmonised, it is the Member State concerned which determines, by exercising its own competence in the matter of direct taxation and with due regard for its fiscal autonomy, the characteristics constituting the tax, which define, in principle, the reference framework or the ‘normal’ tax regime, on the basis of which it is necessary to analyse the condition relating to selectivity (see, to that effect, judgments of 5 December 2023, Luxembourg and Others v Commission, C‑451/21 P and C‑454/21 P, EU:C:2023:948, paragraph 112, and of 10 September 2024, Commission v Ireland and Others, C‑465/20 P, EU:C:2024:724, paragraph 81).

49That determination of the characteristics constituting the tax includes the basis of assessment and the taxable event, but also any exemptions to which that tax is subject (see, to that effect, judgments of 5 December 2023, Luxembourg and Others v Commission, C‑451/21 P and C‑454/21 P, EU:C:2023:948, paragraph 112, and of 19 September 2024, United Kingdom and Others v Commission (Taxation of profits of CFCs), C‑555/22 P, C‑556/22 P and C‑564/22 P, EU:C:2024:763, paragraph 96).

50Given that, in principle, the characteristics constituting the tax define the reference framework in the light of which the examination of the condition of selectivity must be carried out, a general and abstract exemption to which a direct tax is subject, such as the exemption at issue in the main proceedings, is normally not to be classified as ‘State aid’. In so far as that exemption is presumed to be inherent in the ‘normal’ tax regime, it cannot, as a general rule, confer a selective advantage for the purposes of Article 107(1) TFEU.

51Such a finding is derived from the autonomy which the Member States are recognised as having in the area of direct taxation, as has been recalled in paragraph 48 of the present judgment, as that autonomy means that those States have the possibility of making use of the tax classifications, and in particular of the tax exemptions, which they consider the most suitable for achieving the objectives of general interest pursued by those States, whether or not those objectives are tax-related. As was stated by the Advocate General, in essence, in point 33 of her Opinion, in the context of their fiscal autonomy, Member States may legitimately pursue, through direct taxation, in addition to a purely budgetary objective, one or more other objectives which, as the case may be, constitute, when taken together, the objective of the relevant reference framework.

52The Commission has a broad discretion to regard certain aid as compatible with the internal market under Article 107(3) TFEU (judgment of 31 January 2023, Commission v Braesch and Others, C‑284/21 P, EU:C:2023:58, paragraph 94 and the case-law cited). If the exercise of that discretion were required to cover any general and abstract tax exemption, there would therefore be a risk of the Commission’s assessment systematically replacing the Member States’ assessment in the matter, thereby encroaching on their fiscal autonomy.

53The finding set out in paragraph 50 of the present judgment is, however, without prejudice to the possibility of finding, as in the cases which gave rise to the judgment of 15 November 2011, Commission and Spain v Government of Gibraltar and United Kingdom (C‑106/09 P and C‑107/09 P, EU:C:2011:732), that the reference framework itself, as it results from national law, is incompatible with the EU law on State aid, because the tax system at issue has been configured according to manifestly discriminatory parameters intended to circumvent that law (see, to that effect, judgments of 5 December 2023, Luxembourg and Others v Commission, C‑451/21 P and C‑454/21 P, EU:C:2023:948, paragraph 114, and of 10 September 2024, Commission v Ireland and Others, C‑465/20 P, EU:C:2024:724, paragraph 83).

54In addition, by way of derogation from what has been set out in paragraph 50 of the present judgment, a general and abstract exemption to which a direct tax is subject cannot be regarded as falling within the ‘normal’ tax regime where the conditions established by the relevant legislation for benefiting from that exemption are connected, in law or in fact, with one or more specific characteristics of the only category of undertakings capable of benefiting therefrom, those characteristics being inextricably linked to the nature of those undertakings or the nature of their activities. Thus a consistent category of undertakings is formed. The fact that only such a consistent category of undertakings is capable of benefiting from a tax exemption is such as to substantiate the potentially discriminatory and anticompetitive nature of that exemption, even if the reference framework itself has not been configured according to manifestly discriminatory parameters as referred to in the case-law cited in paragraph 53 of the present judgment.

55This is the case, inter alia, for general and abstract tax exemptions which are reserved, in law or in fact, for undertakings which have a certain capital structure, which are active in a particular geographical or economic sector, which are smaller or which, on the contrary, have significant financial resources, or which do not employ any staff in the national territory (see, to that effect, judgments of 10 January 2006, Cassa di Risparmio di Firenze and Others, C‑222/04, EU:C:2006:8, paragraphs 136 and 137; of 15 November 2011, Commission and Spain v Government of Gibraltar and United Kingdom, C‑106/09 P and C‑107/09 P, EU:C:2011:732, paragraphs 104 to 106; and of 19 December 2018, A-Brauerei, C‑374/17, EU:C:2018:1024, paragraphs 31 and 38).

56By contrast, where the conditions laid down by a tax exemption regime are not connected, in law or in fact, with specific characteristics of the only category of undertakings capable of benefiting therefrom which are inextricably linked to the nature of those undertakings or the nature of their activities, that regime falls within the ‘normal’ tax regime. The conditions for granting such a tax exemption appear to be neutral from the point of view of competition, as the fact that some undertakings satisfy those conditions, while others do not, is not relevant in the light of the rules on State aid.

57In that regard, it should be specified that, admittedly, making a tax exemption subject to satisfying certain conditions necessarily means that that exemption will benefit only the group of undertakings which is in a position to satisfy them. However, the Court has already had occasion to find that the fact that only undertakings satisfying the conditions of a measure can benefit from that measure cannot, in itself, make the measure into a selective measure (see, to that effect, judgments of 29 March 2012, 3M Italia, C‑417/10, EU:C:2012:184, paragraphs 41 and 42, and of 19 December 2018, A-Brauerei, C‑374/17, EU:C:2018:1024, paragraph 24 and the case-law cited).

58This means, inter alia, that a tax exemption the application of which is dependent on undertakings’ results does not appear, as such, to be selective (judgment of 15 November 2011, Commission and Spain v Government of Gibraltar and United Kingdom, C‑106/09 P and C‑107/09 P, EU:C:2011:732, paragraphs 80, 82 and 83). Provided that the conditions set out in paragraph 56 of the present judgment are satisfied, the same is true, in principle, as regards tax exemptions the application of which is subject to, for example, a certain recruitment policy or certain environmental measures.

59Furthermore, the fact that a tax exemption is granted irrespective of whether or not the persons subject to the tax to which it relates carry out an economic activity is an indicator that that exemption falls within the reference framework.

60It should also be added that, even where it has to be regarded as not falling within the reference framework, a general and abstract exemption to which a direct tax is subject does not automatically become selective as a result. In such a situation, it is necessary to verify, as was indicated by the Advocate General, in essence, in point 28 of her Opinion, and as is apparent from paragraph 44 of the present judgment, whether the undertakings benefiting from that exemption are, in the light of the objective pursued by that reference framework, in a factual and legal situation comparable to that of undertakings not benefiting therefrom. If that is the case, the exemption will be regarded as selective, unless it can be shown that the differentiation between undertakings deriving therefrom flows from the nature or general structure of the system of which that exemption forms part.

61In this instance, it is in the light of the foregoing considerations that the referring court must examine whether Article 7(1)(1)(a) of the Law on local taxes and charges, which exempts from property tax land, buildings and structures forming part of railway infrastructure where that infrastructure is made available to rail carriers, is such as to confer a selective advantage on the undertakings benefiting from that exemption for the purposes of Article 107(1) TFEU.

62In that regard, first, it is apparent from the documents before the Court that the legal property tax regime, as derived from that law, constitutes the ‘normal’ tax regime and, consequently, the reference framework applicable in this instance.

63As is indicated by the Polish Government, that regime comprises a system of rules applicable to all entities which own or hold immovable property, defining, inter alia, the purpose of the tax, tax base, taxpayers and tax rate. In particular, Article 2(1) of the Law on local taxes and charges lays down the rule that land, buildings or parts thereof, and structures or parts thereof which are connected with carrying on an economic activity are subject to property tax.

64Secondly, it follows from paragraph 54 of the present judgment that the exemption provided for in Article 7(1)(1)(a) of that law forms part of that reference framework unless the conditions for granting that exemption are connected, in law or in fact, with one or more specific characteristics of the only category of undertakings capable of benefiting therefrom, those characteristics being inextricably linked to the nature of those undertakings or the nature of their activities and thus permitting the consideration that those undertakings are part of a consistent category.

65The exemption at issue in the main proceedings is granted to persons subject to property tax on the condition that they own land, a building or a structure forming part of railway infrastructure which is made available to rail carriers.

66Subject to verification by the referring court, that condition does not appear to be connected, in law or in fact, with one or more specific characteristics of the undertakings benefiting from that exemption, which would enable all of those undertakings to be grouped together within a single consistent category as referred to in paragraphs 54 and 64 of the present judgment.

67On the contrary, it appears that that exemption may be obtained by any taxpayer who owns land, a building, or a structure forming part of railway infrastructure which is made available to rail carriers, regardless of whether or not the taxpayer concerned carries out an economic activity and, if so, regardless of the nature of that activity. Thus, the category of beneficiaries of the tax exemption at issue in the main proceedings appears to resemble a disparate whole, comprising both non-economic operators and undertakings, it being possible, moreover, for the latter to have very different legal forms, to be of very different sizes, and to operate in very diverse sectors.

68As is indicated by the referring court, that exemption thus appears to be based on a neutral criterion which applies irrespective of, inter alia, the beneficiary undertakings’ sectors, economic activities, or legal forms.

69It follows that, subject to verification by that court, that exemption must be regarded as forming part of the reference framework applicable in this instance.

70Thirdly, that reference framework appears to have its own legal logic, with its own objectives. It also appears to be incapable of being associated with a consistent body of rules external to it.

71In addition to what has been stated in paragraphs 62 and 63 of the present judgment, it is apparent from the request for a preliminary ruling that the property tax regime not only pursues a budgetary purpose, which is essential to the very function of that tax, but also, through the tax exemption at issue in the main proceedings, pursues an objective of an environmental nature, intended to encourage the undertakings concerned to restore disused railway sidings and to use rail transport, which does not entail carbon dioxide (CO₂) emissions and provides greater safety than road transport.

72As has been stated in paragraph 51 of the present judgment, in the context of its fiscal autonomy, a Member State may legitimately pursue, through direct taxation, in addition to a purely budgetary objective, one or more other objectives which, as the case may be, constitute, when taken together, the objective of the relevant reference framework.

73Lastly, it is not apparent from any of the documents before the Court that that reference framework has been configured according to manifestly discriminatory parameters intended to circumvent the EU law on State aid for the purposes of the case-law cited in paragraph 53 of the present judgment.

74Accordingly, subject to verification by the referring court, it follows from all of the foregoing that the exemption from property tax provided for in Article 7(1)(1)(a) of the Law on local taxes and charges does not confer a selective advantage on the undertakings benefiting from that exemption.

The condition that the measure concerned must distort or threaten to distort competition

75If the referring court were to come to the conclusion that the exemption at issue in the main proceedings confers a selective advantage, the question would arise as to whether that exemption satisfies the condition that the measure in question must distort or threaten to distort competition, as referred to in paragraph 36 of the present judgment.

76In that regard, it should be borne in mind that it is necessary, not to establish that competition is actually being distorted, but only to examine whether that measure is liable to distort competition (see, to that effect, judgments of 27 June 2017, Congregación de Escuelas Pías Provincia Betania, C‑74/16, EU:C:2017:496, paragraph 78, and of 27 January 2022, Fondul Proprietatea, C‑179/20, EU:C:2022:58, paragraph 100).

77Such a condition is satisfied where there is, at the time of the entry into force of the measure, a situation of effective competition on the market concerned (see, to that effect, judgment of 12 January 2023, DOBELES HES, C‑702/20 and C‑17/21, EU:C:2023:1, paragraph 51 and the case-law cited), as the fact that an economic sector has been the subject of liberalisation at EU level may serve to determine that the aid in question has a real or potential effect on competition (see, to that effect, judgment of 18 May 2017, Fondul Proprietatea, C‑150/16, EU:C:2017:388, paragraph 34).

78In addition, the Court has previously held that, in principle, measures which, like the exemption at issue in the main proceedings, are intended to release an undertaking from the costs which it would normally have had to bear in its day-to-day management or in its normal activities distorts the conditions of competition (see, to that effect, judgment of 27 June 2017, Congregación de Escuelas Pías Provincia Betania, C‑74/16, EU:C:2017:496, paragraph 80).

79Lastly, it should be borne in mind that it is for the referring court to assess whether, in view of the general characteristics of the exemption, that exemption distorts or threatens to distort competition; that court is not, however, required to examine each undertaking’s individual situation (see, to that effect, judgments of 15 November 2011, Commission and Spain v Government of Gibraltar and United Kingdom, C‑106/09 P and C‑107/09 P, EU:C:2011:732, paragraph 122; of 28 October 2021, Eco Fox and Others, C‑915/19 to C‑917/19, EU:C:2021:887, paragraph 57; and of 30 May 2024, Autoridad Portuaria de Bilbao v Commission, C‑110/23 P, EU:C:2024:441, paragraph 69).

80It follows from all of the foregoing that Article 107(1) TFEU must be interpreted as meaning that a piece of Member State legislation which exempts from property tax the land, buildings and structures forming part of railway infrastructure where that infrastructure is made available to rail carriers does not appear to be a measure which confers a selective advantage on the beneficiaries of that exemption.

Costs

81Since 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.

Operative part

On those grounds, the Court (Grand Chamber) hereby rules: Article 107(1) TFEU must be interpreted as meaning that a piece of Member State legislation which exempts from property tax the land, buildings and structures forming part of railway infrastructure where that infrastructure is made available to rail carriers does not appear to be a measure which confers a selective advantage on the beneficiaries of that exemption.