For nearly two decades, it has generally been assumed that Finnish transfer tax can be levied on share exchange transactions without conflicting with EU law. That view has largely been based on the 2007 judgment of the Court of Justice of the European Union (CJEU) in Fortum Project Finance (C-240/06), where the CJEU accepted the levy of Finnish transfer tax in connection with a share exchange.
Since then, however, the EU legal framework has changed. In 2008, the EU adopted the current Capital Duty Directive (2008/7/EC), which contains specific protections for certain corporate restructuring transactions. Against that background, the CJEU’s recent judgment in Nova Iberomoldes (C-837/24) has attracted significant attention, as it raises the question whether the conclusions reached in Fortum Project Finance remain valid under the current Capital Duty Directive.
In Nova Iberomoldes, decided in June 2026, the CJEU considered a Portuguese share exchange in which a newly established holding company acquired shares in several companies by issuing new shares as consideration. Although the share exchange involved several companies, Portuguese transfer tax was imposed only in respect of one of the share acquisitions forming part of the transaction, because the relevant target company owned real estate and, under Portuguese law, the acquisition of a qualifying shareholding in a real-estate-rich company could trigger transfer tax.
The CJEU, however, concluded that the tax could not be levied. The CJEU found that the transaction constituted a restructuring operation within the meaning of the Capital Duty Directive. As the acquisition was carried out through a share-for-share exchange in which the acquiring company issued new shares as consideration, the transaction fell within the scope of the Capital Duty Directive’s protection. Importantly, the CJEU rejected attempts to tax individual elements of the arrangement separately. The Court held that the share acquisition forming the basis of the Portuguese tax formed an integral part of the restructuring operation and could not be detached from that operation and treated as an independent taxable transaction.
Why Is This Relevant in Finland?
In reaching its decision, the CJEU emphasised that the Capital Duty Directive prohibits Member States from imposing “any form of indirect tax whatsoever” on restructuring operations falling within its scope. The CJEU concluded that the share-for-share exchange at issue constituted such a restructuring operation and therefore benefited from the protection afforded by the Capital Duty Directive. Although Nova Iberomoldes concerned an internal reorganisation, the decision could also be relevant for third-party acquisitions and management rollover arrangements implemented through share-for-share exchanges.
The decision of the CJEU is potentially significant in Finland. Finnish transfer tax law contains exemptions for certain corporate reorganisations, such as mergers and demergers, but not for share exchange transactions. As a result, transfer tax is generally imposed where shares in a Finnish company are acquired in exchange for newly issued shares in the acquiring company.
Against that background, Nova Iberomoldes raises a more fundamental question: to what extent can Member States impose transfer tax on share-for-share exchanges in light of the Capital Duty Directive? The significance of the judgment for Finland does not necessarily depend on the CJEU’s finding that an individual step within a restructuring operation could not be taxed separately. Unlike the Portuguese rules at issue in Nova Iberomoldes, Finnish transfer tax is imposed directly on the share exchange transaction itself. However, if the Capital Duty Directive is interpreted as protecting share-for-share exchanges that satisfy the conditions laid down for restructuring operations, irrespective of the commercial purpose of the transaction, the CJEU’s broad statement that Member States may not levy “any form of indirect tax whatsoever” on such operations calls into question the compatibility of the Finnish rules with EU law.
Time to Revisit Past Transactions?
The practical significance of Nova Iberomoldes may obviously be considerable. For businesses and shareholders that have paid Finnish transfer tax in connection with share exchange transactions, it may therefore be worthwhile revisiting past transactions. Depending on the circumstances and the applicable limitation periods, grounds may exist for seeking a refund of transfer tax previously paid. Whether Finnish transfer tax can ultimately be reconciled with the CJEU’s latest interpretation of the Capital Duty Directive remains to be seen. What is clear, however, is that Nova Iberomoldes has reopened a question that many had long considered settled.
If you have paid Finnish transfer tax in connection with a share-for-share transaction, we would be pleased to assess whether the Nova Iberomoldes judgment may be relevant to your circumstances and whether there may be grounds for pursuing a refund claim.