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On February 27, 2025, the Court of Justice of the European Union (‘CJEU�) rendered its decision in the case C-18/23. This case concerns a Luxembourg-based Specialized Investment Fund investing in Polish securities and its eligibility to benefit from the exemption applicable for EU/EEA based investment funds when not managed by an external entity authorised by a competent financial market authority.

CJEU observed that measures that are likely to dissuade non-residents from making investments in a Member State restrict the free movement of capital, confirming that the Polish rules applicable in this case were incompatible with EU law.

In the judgment, CJEU ruled that based on Article 63(1) of the Treaty on the Functioning of the European Union (TFEU) a Member State cannot have a law that gives a tax exemption only to investment funds managed by an external management company authorized by that state's financial regulator. If this law excludes internally managed investment funds from another EU country, while only allowing externally managed funds within its own territory, it goes against EU rules.

CJEU's ruling provides self-managed foreign investment funds, which have their own internal management teams made up of individuals, the opportunity to reclaim withholding tax (WHT) that was collected on income generated from their Polish investments.

To reopen cases that have been previously closed, a formal request must be submitted each time. Taxpayers can request the reopening of a case based on the relevant CJEU ruling (C-18/23). The deadline for submitting a request to reopen a closed case is one month for tax authorities or three months for administrative courts from the publication date of the CJEU ruling. The feasibility of reopening should be assessed on a case-by-case basis, considering domestic regulations.

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