CELEX: 62002CC0042
Language: en
Date: 2003-04-10
Title: Opinion of Advocate General Stix-Hackl delivered on 10 April 2003. # Diana Elisabeth Lindman. # Reference for a preliminary ruling: Ålands förvaltningsdomstol - Finland. # Freedom to provide services - Lottery tickets - Amount won in a game of chance held in another Member State - Income tax - Tax on games of chance - Special regime in the Åland Islands. # Case C-42/02.

OPINION OF ADVOCATE GENERALSTIX-HACKL delivered on 10 April 2003 (1)
         Case C-42/02 Diana Elisabeth LindmanvSkatterättelsenämnde(Reference for a preliminary ruling from the Ålands Förvaltningsdomstol (Finland))
            ((Article 46 EC – Article 49 EC – Lottery winnings – Taxation – Cohesion of the taxation system – Proportionality))
            
      
         
        I ─ Introduction
      
       1.  In this case, the Court is again asked to examine, following its judgments in  
       Schindler , 
      
         			(2)
         		 Läärä  
      
         			(3)
         		 and  
       Zenatti , 
      
         			(4)
         		 the issue of the compatibility of national legislation on games of chance with the Treaty provisions on the freedom to provide
      services. The Förvaltningsdomstol in Åland is seeking a preliminary ruling to establish whether Article 49 EC prohibits a
      Member State from treating winnings from lotteries held in another Member State as the winner's taxable income, whereas winnings
      from lotteries held in the Member State concerned are exempt from income tax. 
       II ─ The relevant legislation
      
      
      
      A ─
       The lottery tax law (552/1992) 
       2.  Pursuant to Paragraph 1 of the lottery tax law, lottery tax is to be paid to the State on lotteries held in Finland.
      
       3.  Under Paragraph 2(1) of that law,  
      goods lotteries, money lotteries, bingo, betting on horse races ... among others are to be regarded as lotteries.
      
       4.  Paragraph 3 of the lottery tax law provides inter alia:  
      The organiser of a lottery shall be liable to tax.
      
      
      
      
      
      B ─
       The income tax law (1535/1992)Income and recipients of tax. Tax on earned income shall be paid to the State, the municipality and the parish. Tax on capital
      income shall be paid to the State. The right of the municipalities to a portion of receipts from capital income shall be taken
      into account on distribution of tax receipts in accordance with this law and the law on collection of taxes (611/78).Lottery winnings. Winnings from lotteries listed in Paragraph 2 of the lottery tax law shall not be deemed taxable income.
      However, winnings which can be regarded as fair remuneration for services rendered or which can be viewed as pay under the
      law on advance collection of taxes shall be taxable income. 
       5.  Paragraph 1(1) and (2) of the income tax law provides:
      
      
       6.  Paragraph 9(1) and (2) of the income tax law determines who is liable for tax and on what income. According to that paragraph,
      persons who have been resident in Finland during the tax year are liable in respect of income earned in Finland and elsewhere.
      Taxable income is the income of persons liable for tax in money or value. The income of natural persons and estates is to
      be divided into two types of income, namely capital income and earned income.
      
       7.  In regard to lottery winnings, Paragraph 85 of the income tax law provides:
      
      
      
      
      
      C ─
       The municipal tax law for the Province of Åland
      
       8.  The following is an extract from Paragraph 1(1):Scope of the law. Tax shall be paid to the municipality on earned income; losses may be set off on assessment to municipal
      tax in accordance with the provisions of the income tax law (FFS 1535/92) and the regulation on tax on income (FFS 1551/92)
      with the exceptions allowed under that law and other specific provisions.
       III ─ Facts, main proceedings and question referred
      
       9.  Ms Lindman, the appellant in the main proceedings, is a Finnish citizen residing in the municipality of Saltvik in Åland.
      On a visit to Sweden, she bought a ticket for one of the lotteries run by AB Svenska Spel. In the draw in Stockholm on 7 January
      1998 she won SEK  1 000 000. Her lottery winnings ─ equivalent to FIM 672 100 ─ were included in her taxable income for the
      1998 tax year.
      
       10.  Since the lottery winnings were viewed as taxable income, they were subject to national income tax payable to the Finnish
      State, municipal tax payable to the municipality of Saltvik, Church tax payable to the parish and sickness insurance premiums,
      levied pursuant to the sickness insurance law which is linked to the insured person's local tax liability.
      
       11.  The winnings were not considered to be exempt from tax under Paragraph 85 of the income tax law, as that exemption applies
      only to the lotteries listed in Paragraph 2 of the lottery tax law, which includes only lotteries held in Finland. Nor were
      the winnings deemed to constitute capital income since capital income is interpreted as income which can be regarded as having
      been acquired from property, which was not the case in this instance.
      
       12.  Ms Lindman challenged the decision on tax liability before the tax appeals authority. Her application to have the tax on her
      lottery winnings from Sweden cancelled or reduced was, however, dismissed by decision of 22 May 2000, after the tax appeals
      authority had obtained an opinion from the Directorate for Taxation (skattestyrelsen).
      
       13.  Ms Lindman appealed that decision before the Förvaltningsdomstol, Åland, the court in the main proceedings.
      
       14.  She claimed that the tax levied on her lottery winnings from Sweden should be cancelled. In the alternative, the winnings
      should be taxed as capital income, that is to say at a lower rate of tax.
      
       15.  In the main proceedings, the Finnish authorities take the view that the tax exemption provided for in the income tax law applies
      exclusively to lotteries held in Finland and that this does not pose an obstacle to the freedom of a Swedish lottery company
      to provide services in Finland, within the meaning of Article 49 EC.
      
       16.  According to the information supplied by the Förvaltningsdomstol, Åland, on the basis of the law on lotteries, the exemption
      under the income tax law applies only to lotteries held in Finland. The national court therefore considers that the levying
      of income tax on winnings from lotteries held outside Finland (as earned income or capital income) may constitute discrimination
      based on where the service is provided.
      
       17.  Consequently, by decision of 5 February 2000, the Förvaltningsdomstol, Åland, referred the following question to the Court
      for a preliminary ruling pursuant to Article 234 EC:Does Article 49 of the Treaty establishing the European Communities preclude a Member State from applying rules under which
      lottery winnings from lotteries held in other Member States are included in the taxable income of the winner on assessment
      to income tax, whereas lottery winnings from lotteries held in the Member State in question are exempt from tax?
       IV ─ Submissions of the parties
      
       18.  Ms Lindman, the Finnish, Belgian and Danish Governments, the Commission, the EFTA Surveillance Authority and the Norwegian
      Government have submitted observations in this case.
      
       19.  Ms Lindman merely contends that she considers the taxing of her lottery winnings to be discriminatory. In her view, her winnings
      would not have been taxed had she been resident in Sweden or won a Finnish lottery.
      
       20.  The Finnish, Belgian, Danish and Norwegian Governments consider a taxation regime, like the Finnish regime, under which winnings
      from lotteries held in other Member States are taxed, whereas winnings from lotteries held in the national territory are not,
      to be compatible with the freedom to provide services under Article 49 EC. In that context, those governments rely principally
      on the Court's decisions in  
       Schindler , 
      
         			(5)
         		 Läärä  
      
         			(6)
         		 and  
       Zenatti . 
      
         			(7)
         		 Although fundamentally conceding that treating lottery winnings in this way may restrict the freedom to provide services,
      they do not consider this legislation to be necessarily discriminatory. All of the governments claim that the Finnish legislation
      is in any event justified for overriding public interest considerations and contend that, according to the abovementioned
      case-law, the Member States enjoy a large margin of discretion in regulating games of chance.
      
       21.  Taking the argument further, the Finnish Government explains that the organisation of games of chance in Finland is subject
      to rules designed to secure legal certainty for players, prevent crime and limit damage to society as a result of gambling.
      In  
       Schindler , those objectives were acknowledged to provide justification for restricting the freedom to provide services and they also
      justify the rules on taxation at issue, as they constitute part of the national regulation of lotteries.
      
       22.  The Finnish Government concedes that the revenue from games of chance organised by the three companies permitted to engage
      in gambling in Finland, is substantial. It points out that that this revenue goes to the national budget to ensure that it
      is used, as far as possible, for society's benefit. The Finnish State has therefore refrained from levying too heavy a tax
      on gambling in order to avoid jeopardising the use of the proceeds for public interest purposes.
      
       23.  The Finnish Government further maintains that this is why lottery activities in Finland are subject to a very low rate of
      taxation and, in that regard, the lottery tax is the only tax provided for. Currently, the rate of that tax is not the same
      as the rate of tax a winner would have to pay were his winnings treated as taxable income.
      
       24.  The Finnish Government claims that since it is unable to tax foreign lottery organisers, it has no option but to tax the winners
      of lotteries held abroad. If it did not, Finnish winners of foreign lotteries would, like the foreign lottery organisers themselves,
      have a tax advantage, regardless whether in the country of origin of the lottery the gaming revenue was used in the public
      interest or the same protective objectives were taken into account as in the Finnish legislation.
      
       25.  In the oral proceedings, the Finnish Government further maintained that the use of lottery revenue for benevolent purposes
      was merely an additional argument as regards compatibility with Community law. Above all, in Finland games of chance were
      generally subject to restrictions based on various measures relating to stakes and winnings. The level of winnings critically
      determined the attractiveness of the games. The taxation of foreign lotteries meant that there was less incentive to participate
      in them, making it possible to continue to monitor and protect against the damaging social effects of the game. Those objectives
      could be achieved only by taxing winnings from foreign games of chance; there were no less restrictive measures.
      
       26.  The Finnish Government takes the view that restrictions under national legislation on organising gaming and on the conditions
      to which such activities are subject, are justified for overriding public interest considerations ─ linked to player protection,
      public policy and the financing of public interest activities ─ even where such national legislation is discriminatory.
      
       27.  The rules on taxation in question cannot, however, be held to be discriminatory. The reason why winnings from national lotteries
      are not taxed is because those lotteries are taxed via their organiser. In addition, winnings in national lotteries are also
      taxable if the lotteries are held without permission. Consequently, there is no discrimination based on nationality.
      
       28.  But even if there were such discrimination, all in all, it could in any event be justified on the basis of Article 46 EC.
      The aim of regulating the activity of lotteries is in fact to prevent illegal games of chance, money-laundering and all other
      forms of criminality, and is consonant with public policy and security objectives. Furthermore, severe addiction to gambling
      has to be considered an illness; consequently, the national legislation on lotteries also serves public health interests.
      
       29.  The Finnish Government finally concedes that there is no cap on stakes in Finnish lotteries.
      
       30.  In relation to the Finnish legislation, the Belgian Government points out that although winnings from lotteries authorised
      in Finland are exempt from taxation, taxes are levied on the lottery organisers. The taxation of winnings from foreign lotteries
      has therefore to be perceived as a corrective element, enabling account to be taken of the fact that Finnish lottery organisers
      are taxed. If foreign lottery winnings were not taxed, there would be an incentive to take part in lotteries abroad, with
      the result that the national authorities would lose control over the existing supply of games of chance, with incalculable
      social consequences. 
      
       31.  The Belgian Government also takes the view that the Finnish legislation at issue is justified for overriding public interest
      considerations, as the Court ruled in its judgments in  
       Kraus  
      
         			(8)
         		 and  
       Gebhardt , 
      
         			(9)
         		 for example. Those considerations include consumer protection and public policy, in particular.
      
       32.  The Belgian Government points out that the damaging effects of lotteries for individuals as well as society manifest themselves
      in the State in which the player is resident and not in the State in which the lottery ticket is purchased. It is therefore
      a matter for the Finnish State to limit those damaging effects as far as possible by exempting from taxation only those winnings
      obtained from organisers authorised to run lotteries and subject to supervision. In Finland, lotteries are run by an organisation
      supervised by the Finnish State. That involves a policy of channelling designed to keep players away from the  
      grey area of gambling. That policy risks being undermined by foreign lotteries. According to the judgment in  
       Zenatti , 
      
         			(10)
         		 the aim of reducing the opportunities to engage in games of chance is sufficient to justify a restriction on the freedom
      to provide services.
      
       33.  Furthermore, the Finnish legislation is not discriminatory in terms of nationality. For the purposes of tax exemption, a distinction
      is made not on the basis of nationality but according to whether the lottery organiser is licensed. In addition, the Finnish
      legislation, which is designed to limit the supply of games of chance to a socially acceptable level, is proportionate in
      view of the gambling addiction that lotteries can induce.
      
       34.  The Danish Government largely endorses the legal assessments described above. It further points out that it is submitting
      observations in this case because the type of lottery taxation applied in Finland is customary among the Member States generally.
      Were winnings from foreign lotteries to be exempt from taxation, the effect would be to encourage people in the individual
      Member States to take part in foreign lotteries, thereby undermining the legislation the Member State concerned had put in
      place to protect overriding public interest considerations, even if the lottery was subject to regulation in another Member
      State.
      
       35.  The Danish Government emphasises that the tax provisions at issue form an integral part of the legislation designed to regulate
      and restrict the organisation and marketing of lotteries and other games of chance, which the Court has acknowledged to be
      justified in the general interest for a range of overriding public interest considerations. Specifically in the light of the
      opportunities the internet offers, the prohibition on marketing games of chance can remain effective only if it is underpinned
      by additional fiscal measures.
      
       36.  The Netherlands Government argues that the main aim of the Finnish legislation is to levy the taxes due to it. Who is liable
      for and therefore pays the tax is irrelevant. Finland taxes winners of games of chance either directly or indirectly via the
      games' organisers. Consequently, whereas a Finnish winner in a Finish lottery has already paid his tax via the lottery organiser,
      a Finnish winner in a foreign lottery, which is not itself subject to taxation in Finland, has yet to pay tax. It follows
      that the Finnish tax rules are not discriminatory and are not incompatible with Article 49 EC.
      
       37.  But even were they to be held to be discriminatory, they are none the less compatible with Article 49 EC on the grounds set
      out in Article 46 EC, as the tax rules at issue are designed to combat the damaging effects of gambling and do not exceed
      what is necessary to achieve those aims. Taxing winnings from a lottery held in another Member State, with the result that
      the level of winnings is restricted, offers the only opportunity of limiting public interest in such games, without completely
      prohibiting participation in them.
      
       38.  The Norwegian Government also cites the grounds for justification under Article 46 EC and, in relation to the issue of public
      policy, maintains that taxing winnings from games of chance also helps combat money-laundering. Certificates of winnings can
      in fact be purchased by individuals to prove to the tax authorities that the money comes from a legitimate source.
      
       39.  In contrast, the Commission and the EFTA Surveillance Authority take the view that taxing winnings from foreign lotteries
      exclusively, as is the case in Finland, is discriminatory and cannot be justified for public interest considerations. It is
      therefore contrary to Article 49 EC.
      
       40.  In the Commission's view, the exceptions provided for in Article 46 are not applicable to this case. In particular, the Finnish
      provisions at issue are not designed to regulate the activity of games of chance for public interest considerations or to
      protect individuals from the dangers of gambling. The effect of the Finnish legislation is in fact that only foreign lottery
      winnings are to be deemed to be taxable income. In the oral proceedings, the Commission claimed that the Finnish Government's
      argument that the legislation at issue would contribute to public policy and public health was vague and far-fetched. In addition,
      the reasons cited by the Court in its judgments in  
       Schindler ,  
       Läärä  and  
       Zenatti , cannot justify direct discrimination of the kind present in this case. Even assuming that the Finnish tax provisions were
      not discriminatory, there could be no overriding public-interest considerations to justify restricting the provision of services.
      
       41.  Finally, the Commission cites the judgment in  
       Fischer , 
      
         			(11)
         		 according to which the principle of fiscal neutrality precludes a Member State from levying value added tax on transactions
      linked to unauthorised games of chance if the equivalent licensed activities are exempt from taxation. All the more reason
      then that, pursuant to the principle of non-discrimination, a Member State cannot treat less favourably than a winner in a
      national game of chance a national winner who has taken part in a game of chance held outside the country. In the oral proceedings,
      the Commission also pointed to the major discrepancy between the level of taxation imposed via a national lottery organiser
      and the income tax that might be payable by the winner of a foreign lottery. In addition, there was the possibility of double
      taxation, since the Swedish lottery too was subject to taxation.
      
       42.  The EFTA Surveillance Authority largely concurs with the Commission's view. It notes that the Finnish income tax rules on
      lottery winners differ according to the place of establishment of the service-provider and therefore limit the freedom to
      provide services of organisers of games of chance. The unequal fiscal treatment of national and foreign lottery winnings is
      likely to deter Finnish players from taking part in foreign lotteries.
      
       43.  The Member States will no doubt generally consider games of chance to involve dangers of a moral, religious or cultural nature,
      but given the fact that there are several national lotteries in Finland, it is questionable whether such considerations can
      be relied on to justify treating foreign lotteries completely differently. Discriminatory national legal provisions can be
      justified only exceptionally on the grounds set out in Article 46 EC, but those grounds are not met in relation to the tax
      rules at issue.
       V ─ Analysis
      
       44.  On several previous occasions, notably in  
       Schindler , 
      
         			(12)
         		 Läärä  
      
         			(13)
         		 and  
       Zenatti , 
      
         			(14)
         		 the Court has had to rule on the compatibility with fundamental freedoms of national provisions relating to games of chance.
      
       45.  But I must draw particular attention to two differences between this case and those mentioned at point 44 above, which will
      have to be taken into account in the following analysis under Community law.
      
       46.  To begin with, in this case fiscal legislation on games of chance is for the first time being assessed in the context of the
      fundamental freedoms.
      
       47.  The national court wishes to ascertain whether the levying of income tax on winnings from lotteries held in other countries
      ─ whereas winnings from lotteries organised in the Member State in question are exempt from income tax ─ is compatible with
      the freedom to provide services under Article 49 EC.
      
       48.  In addition, in the cases in which the Court has previously given a ruling concerning the freedom to provide services in relation
      to games of chance, foreign service-providers or their representatives were active in the territory or on the market of the
      Member State of the recipient of the service, or were actually prevented from engaging in such activity.
       49.  
      
      In
         
        Schindler , nationals of a Member State were sent advertising material and tickets for a lottery by a lottery organiser resident in
      another Member State (or his agent) to allow them to participate in that lottery. 
      
         			(15)
         		
      
      
      
      
       50.   Läärä  concerned the installation and operation of slot machines by an operator resident in another Member State. 
      
         			(16)
         		 51.  
      
      In
         
        Zenatti , a representative active in the recipient Member State was organising betting on sporting events through a foreign promoter. 
      
         			(17)
         		
      
      
      
      
       52.  To that extent, all of the abovementioned cases concerned national rules relating to games of chance in the territory of the
      Member State concerned, and above all the issue of controlling the supply of games of chance in that State.
      
       53.  This case, in contrast, does not concern the extent to which a foreign provider of gambling services may engage in that activity
      in another Member State. The issue is not activity undertaken by the Swedish lottery in Finland. The basic issue in this case
      in fact concerns receiving a service provided in another Member State. This involves one manifestation of the passive freedom
      to provide services, since Ms Lindman took part in the Swedish lottery during a stay in Sweden. 
      
         			(18)
         		
       54.  Receiving that service in this case was clearly incidental to, rather than the purpose of, Ms Lindman's stay abroad. The main
      issue in fact relates not so much to restrictions on the rights of an individual to travel to another Member State as restrictions
      affecting the freedom to provide the service itself, that is to say aspects of  
      freedom of movement for products. The circumstances of this case are therefore similar to cases in which a person uses the telephone, fax or internet to take
      part in a lottery provided by a foreign organiser ─ simply mail order services therefore which, in contrast to those at issue
      in  
       Schindler , are not connected with the activities of foreign providers of lottery services in the territory of another Member State.
      
      
      
      A ─
       The restrictive effect on the freedom to provide services of the fiscal legislation at issue
      
       55.  The first point to make is that it is settled case-law that although in the current state of Community law the area of direct
      taxation is not a Community responsibility, the Member States must exercise the competence they have retained in compliance
      with Community law. 
      
         			(19)
         		
       56.  As the Court has already ruled in  
       Schindler , 
      
         			(20)
         		 the organisation of a lottery constitutes a service within the meaning of Article 50 EC. In terms of its compatibility with
      the freedom to provide services, the fiscal legislation at issue here must therefore be assessed in the light of Article 49
      EC.
      
       57.  It is settled case-law that Article 49 EC prohibits not only any discrimination based on nationality against a service-provider
      resident in another Member State, but all restrictions on the freedom to provide services generally.
      
       58.  All measures ─ even if they apply without distinction to both national service-providers and service-providers from other
      Member States ─ which are likely to prohibit, impede or render less advantageous the exercise of that freedom must be considered
      to constitute restrictions of that nature. 
      
         			(21)
         		
       59.  Admittedly, the taxation of lottery winnings at issue here does not in itself prevent Finnish nationals from taking part in
      lotteries in another Member State. But that taxation undoubtedly makes such lotteries appear less attractive than lotteries
      whose winnings are exempt from taxation and is therefore likely to deter Finnish players from taking part in lotteries abroad.
      According to the information provided by the Finnish Government that too is the aim of this fiscal legislation.
      
       60.  The tax provisions at issue therefore basically constitute, both from the point of view of the foreign organiser and from
      that of the Finnish participant, a restriction on the freedom to provide services. 
      
         			(22)
         		
       61.  That point is fundamentally uncontested by the governments which have submitted observations in these proceedings.
      
       62.  The tax provisions at issue can therefore be compatible with the freedom to provide services only if the requisite justification
      exists and proper account is taken of the principle of proportionality.
      
      
      
      B ─
       The possible justification
      
       63.  Infringements of the freedom to provide services may in principle be justified on the grounds of public interest specifically
      provided for in Article 46 EC, which must be applied in conjunction with Article 55 EC or, in accordance with case-law, for
      overriding public interest considerations.
      
       64.  In the  
       Schindler ,  
       Läärä  and  
       Zenatti  judgments, on which the governments party to this case principally rely, the Court did indeed refer to the justification
      under Article 46 EC but did not undertake a discrete analysis on the basis of that article.
      
       65.  In point of fact, citing the special features of games of chance and the specific dangers inherent in them ─ which have been
      explicitly mentioned in this case also ─ the Court acknowledged the existence of overriding public interest considerations
      that may justify infringements of the freedom to provide services in relation to gambling.
      
       66.  The Court held that the reasons cited in the abovementioned cases ─ such as preventing the risk of fraud and other criminal
      acts, the exploitation of gambling addiction and the prevention of damaging consequences for individuals and society as well
      as the use of the profits for public and charitable purposes ─ had to be taken not individually but together, and summarised
      those reasons as concerning  
      the protection of the recipients of the service and, more generally, of consumers as well as the maintenance of order in society. 
      
         			(23)
         		
       67.  In this case, however, it seems doubtful whether the fiscal legislation at issue can in any way be justified by ─ those or
      other ─ overriding public interest considerations.
      
       68.  In its case-law, the Court consistently refers in the context of such justification to measures that are  
      applicable without distinction. 
      
         			(24)
         		
       69.  The Court has, for example, always characterised even the national rules on games of chance, in relation to which it has acknowledged
      that the abovementioned overriding public interest considerations are justified, as applying without distinction to economic
      operators whether established in the national territory or in another Member State. 
      
         			(25)
         		
       70.  However, the Court has repeatedly declared that the discriminatory measures may be justified only on the basis of the grounds
      explicitly provided for in Article 46 EC. 
      
         			(26)
         		
       71.  As stated by the Finnish Government, although in his Opinion in  
       Danner  Advocate General Jacobs spoke in favour of moving away from the distinction between the grounds justifying discriminatory
      measures and the grounds justifying measures that apply without distinction, 
      
         			(27)
         		 it cannot be inferred from the judgment in that case that the Court would have adopted that suggestion, particularly since
      it refrained from explicitly characterising the measures at issue as discriminatory. 
      
         			(28)
         		
       72.  In fact, only recently in its judgment in Case C-388/01, the Court confirmed that ─ at least where they provide for a distinction
      based on nationality ─ discriminatory measures  
      are compatible with Community law only if they can be covered by an express derogating provision such as Article 46 EC ...
      namely public policy, public security or public health. 
      
         			(29)
         		
       73.  It is therefore clearly still necessary to distinguish, in terms of possible justification, between measures which ─ though
      they restrict the freedom to provide services ─ apply without distinction and discriminatory measures, even if case-law provides
      no clear differentiating criteria. 
      
         			(30)
         		
       74.  It is in any event clear that, in connection with the grounds for justification it lists, Article 46 EC refers to  
      special rules for foreigners. The provision is thereby specifically referring to all measures which discriminate on the basis of nationality ─ and in
      the case of an undertaking that means the location of its registered office. 
      
         			(31)
         		
       75.  But in some cases the Court has also referred to the origin of the service in relation to discriminatory measures. 
      
         			(32)
         		
       76.  Particularly in cases like this, in which aspects of the freedom to provide services pertaining to the individual are of lesser
      significance and it is rather the service itself that is at issue, it seems appropriate to identify discriminatory rules in
      the field of services on the basis of the origin of the service and not on the basis of the location of the registered office
      or nationality of the service-provider. As  
      freedom of movement for products, such emanations of the freedom to provide services are in fact more akin to the free movement of goods ─ where, again, the
      criterion of nationality is not a determining factor ─ than the free movement of persons.
      
       77.  In that context, it has to be noted in this case that it is exclusively winnings from lotteries held in other Member States
      which are taxable, that is to say services originating in other Member States. 
      
       78.  The reference by the Finnish Government to the fact that taxation of lottery winnings at issue concerns not only foreign lotteries
      but all lotteries held in Finland without authorisation, has, in my view, to be rejected simply because legally organised
      games of chance cannot be equated with illegal games of chance.
      
       79.  In addition, in this case ─ in contrast to the  
       Schindler ,  
       Läärä  and  
       Zenatti  cases which concerned activities involving games of chance in the Member State of the recipient of the service 
      
         			(33)
         		 ─ there is no connection with a permit or concession to take up lottery-related activities in Finland.
      
       80.  Furthermore, I cannot agree with the view expressed by the Finnish, Belgian and Netherlands Governments that the fiscal legislation
      at issue is fundamentally not discriminatory because national lottery organisers have to pay a lottery tax and thus, in the
      final analysis, winnings from national and foreign lotteries are taxed equally.
      
       81.  This is not in fact comparable taxation. As is apparent from the information supplied by the Finnish Government, the rate
      of tax to be paid by Finnish organisers of games of chance is not the same as lottery winners would have to pay were such
      winnings considered to be taxable income. As the Commission has stated, the rate of income tax can amount to up to 56%, whereas,
      according to the information supplied by the Finnish Government, the lottery tax is very low. It therefore has clearly to
      be assumed that winnings from national lotteries are subject to a lower level of taxation than winnings from foreign lotteries.
      
       82.  In addition, income and lottery tax also differ in the way in which they are calculated. Since foreign lottery winnings are
      included in the graduated scale of Finnish income tax, the actual level of taxation of those winnings ultimately depends on
      the amount of the winnings and apparently also on the amount of the Finnish lottery winner's residual income.
      
       83.  All in all, it has therefore to be noted that, in contrast to the national legislation at issue in  
       Schindler ,  
       Läärä  and  
       Zenatti , the fiscal provisions at issue are not rules which apply without distinction and are therefore able to be justified by overriding
      public interest considerations. They are in fact a discriminatory measure which may be justified only on the grounds listed
      in Article 46 EC.
      
      
      
      C ─
       The economic reasons
      
       84.  The relationship between States and the gambling industry could generally be described as ambivalent. On the one hand, because
      of the social risks gambling involves, States have traditionally felt obliged to regulate or restrict it; however, gambling
      is of great significance for the public purse, both in fiscal and in general economic terms.
      
       85.  In his Opinion in  
       Schindler , Advocate General Gulmann discussed in detail the economic implications of games of chance and referred to the ─ to some
      extent ─ far-reaching consequences of the liberalisation of gambling for the national budgets of the Member States. 
      
         			(34)
         		
       86.  However, restrictions on the freedom to provide services are acceptable from the point of view of Community law only to the
      extent that they are linked with the regulatory and protective policies the Member States apply because of the specific risks
      of gambling.
      
       87.  Even if, for some Member States, being guaranteed the appropriate margin of appreciation in relation to gambling ─ as set
      out in the judgments in  
       Schindler ,  
       Läärä  and  
       Zenatti  ─ serves economic interests also, that cannot be allowed to obscure the fact that Community law cannot in principle be used
      as a lever for maintaining restrictions for economic or protectionist reasons.
      
       88.  That is the clear implication of settled case-law, according to which economic grounds are not included among the grounds
      under Article 46 EC or among the overriding public interest considerations which may justify restricting a freedom guaranteed
      under the Treaty. 
      
         			(35)
         		
       89.  The first consequence of that in this case is that the fiscal legislation at issue cannot be justified merely on the basis
      that it is being used to secure financing for certain benevolent objectives.
      
       90.  In my view, that also emerges from the judgment in  
       Zenatti , in which the Court held that even if it is  
      not irrelevant that lotteries and other types of gambling may contribute significantly to the financing of benevolent or public interest
      activities,  
      that motive cannot in itself be regarded as an objective justification for restrictions on the freedom to provide services. 
      
         			(36)
         		
       91.  Many of the governments which have submitted observations have more or less explicitly referred to safeguarding tax revenue
      from lotteries. Generally speaking, however, the need to avoid a fall in revenue ─ as would, for example, happen if players
      were to take part in the lotteries of organisers in other Member States ─ cannot justify restrictions on the freedom to provide
      services either under Article 46 EC or by way of an overriding public interest consideration. 
      
         			(37)
         		
       92.  In contrast, however, safeguarding the cohesion of the tax regime ─ an issue the Court has examined on several occasions in
      connection with fiscal legislation ─ cannot be considered to constitute an economic reason. 
      
         			(38)
         		
       93.  But setting aside the problem of whether that justification can in any event apply to discriminatory measures like those at
      issue in this case, it is settled case-law that fiscal inequalities can be justified for reasons relating to cohesion of the
      tax regime only if there is a direct connection between the fiscal measures in question. 
      
         			(39)
         		
       94.  In this case, however, there is no question of a direct connection between the taxation of organisers of Finnish lotteries
      and the tax exemption for Finnish lottery winners.
      
       95.  Firstly, these are in fact two separate taxes on different taxable persons and, secondly, as I have already pointed out, the
      amount of tax payable by Finnish lottery organisers is not equivalent to the amount of tax that Finnish lottery winners would
      have to pay were their winnings taxed at the same rate as foreign lottery winnings.
      
      
      
      D ─
       Proof of justification for the legislation at issue and proportionality
      
       96.  At least some elements of the arguments adduced by the Finnish Government can be included among the grounds of public policy,
      public security and, above all, public health listed in Article 46 EC. As the Finnish Government has explained, the legislation
      at issue is particularly designed to curb addiction to gambling and avert the risk of money-laundering and other crimes.
      
       97.  But a national provision which restricts a fundamental freedom guaranteed under the Treaty can be justified on the grounds
      cited in Article 46 EC only if it respects the principle of proportionality.
      
       98.  According to settled case-law, this means that a provision of that nature must be appropriate to achieve the aim pursued and
      may not go beyond what is required to achieve that aim; the same result must not therefore be able to be achieved by less
      restrictive means. 
      
         			(40)
         		
       99.  Before I consider whether the provision at issue is appropriate and necessary, let me, separately and briefly, draw attention
      to a certain ambiguity in the arguments advanced by the Finnish Government and also by the other governments in this case.
      
       100.  On the one hand, the line of argument used to justify the tax at issue intimated that the tax itself served certain objectives,
      such as curbing gambling addiction.
      
       101.  However, the broader argument was no doubt that the fiscal legislation at issue was a necessary part of the Finnish gambling
      regime because it prevented a Member State's protective objectives, such as a  
      policy of channelling in relation to gambling ─ which the Court basically held to be justified ─ from being undermined as a result of the opportunity
      to play foreign games of chance.
      
       102.  It has finally to be said that the Court left it to the discretion of a Member State to determine  
      the scope of the protection which a Member State intends providing in its territory in relation to lotteries and other forms
      of gambling. 
      
         			(41)
         		
       103.  This has plainly to be construed as meaning that the Member States may basically regulate the framework conditions and level
      of protection applicable to the provision of gambling activities  
       in their territory  as they see fit. In  
       Schindler ,  
       Läärä  and  
       Zenatti  the main issue was controlling supply. 
      
         			(42)
         		 In that context, the Court held that it was for the national authorities to consider  
      whether, in the context of the aim pursued, it is necessary to prohibit activities of that kind, totally or partially, or
      only to restrict them and to lay down more or less rigorous procedures for controlling them. 
      
         			(43)
         		 But that power of appreciation certainly does not extend so far that a Member State, as in this case, can prevent or restrict
      mere participation in a lottery organised in another Member State which is not linked to lottery activities in its territory
      or on its market.
      
       104.  In those circumstances, the lottery services provided in the other Member State are not in fact, or are only indirectly, part
      of the  
      supply of games of chance in the Member State concerned, which the latter is unquestionably authorised to control or restrict. 
      
         			(44)
         		
       105.  As far as the aim of preventing money-laundering or other crimes is concerned, that is to say protecting public policy, it
      is scarcely apparent from the information provided by the governments involved in this case how the tax at issue is appropriate
      or necessary for the achievement of those aims.
      
       106.  As regards combating money-laundering, the Norwegian Government pointed out that without the tax at issue foreign winnings
      certificates could be purchased by individuals to prove to the tax authorities that the money came from a legitimate source.
      
       107.  In the first place, taxation is likely to prevent that kind of scheming only to the extent that it would make money-laundering
      less attractive since the illegal funds in question would be taxable. But the measure alone has no effect on money-laundering
      as such.
      
       108.  As regards the need to tax foreign lottery winnings to prevent money-laundering, the fact is that this could be better achieved
      by verifying the existence of lottery winnings, and that could basically be done without taxing those winnings. 
      
         			(45)
         		
       109.  From that perspective, I do not consider that generally taxing foreign winnings is proportionate to the aim pursued.
      
       110.  On the aim of curbing gambling addiction, that is, protecting health, the submissions of the parties contain rather more compelling
      arguments. The aim is clearly to use fiscal measures to reduce the level of winnings and thereby make gambling less attractive.
      
       111.  Since a lottery's attraction is commensurate with the level of possible winnings, the provision at issue is, in principle,
      appropriate for the purposes of curbing gambling addiction.
      
       112.  However, several factors militate against the fiscal legislation at issue being proportionate or necessary for the purposes
      of protecting public health.Incidentally, those objections would also largely apply to justification for the provision at issue on the basis of the overriding
      public interest considerations mentioned in the proceedings.
      
       113.  The statements made by the Finnish Government in its written observations that it kept tax on lotteries as low as possible
      in Finland in order to avoid jeopardising the financing of benevolent activities, are scarcely consistent with the aims pursued
      ─ by Finnish tax policy on lotteries ─ of curbing addiction to gambling, on grounds of public health protection.
      
       114.  Generally speaking, it is apparent from the case-law on Article 46 EC that the grounds for justification that article lists
      do not permit Member States to operate a double standard on restrictions. As regards public policy, the Court has held that
      a Member State may not, on that ground, adopt measures against a national of another Member State  
      by reason of conduct which, when engaged in by nationals of the first Member State, does not give rise to punitive measures
      or other genuine and effective measures intended to combat that conduct. 
      
         			(46)
         		 Transposed to this case, this means that no more restrictive measure may be applied to foreign lotteries on grounds of preventing
      gambling addiction than are applied to national lotteries. In that context, it has to be pointed out that the Finnish Government
      was unable to cite measures comparable to the contested provisions and designed to prevent gambling addiction in the context
      of Finnish lotteries.
      
       115.  The lottery tax which a Finnish lottery organiser has to pay is hardly comparable to the tax on foreign lottery winnings in
      terms of its effect (on curbing addiction) simply because it is patently at a lower rate and, more particularly, because the
      lottery player pays it only indirectly. In addition, the Finnish Government has conceded that, in Finland, there is no cap
      on lottery stakes.
      
       116.  When, finally, the Finnish Government argues that the taxation of foreign lottery winnings is merely designed to compensate
      for the lack of taxation through lottery tax, that taxation would also need to take account of whether the foreign lottery
      was already subject to taxation in its country of origin. Otherwise, the provision at issue goes beyond what is necessary
      to achieve the declared aim.
      
       117.  As regards the possibility of ascertaining this, it is possible to refer ─ and the Court has already done so on several occasions
      in similar cases ─ to Directive 77/799/EEC 
      
         			(47)
         		 according to which a Member State can request the competent authorities for any information that may enable it to effect
      a correct assessment of taxes on income. 
      
         			(48)
         		 In fact, as a result of the fiscal legislation at issue, foreign lottery winnings are included in the basis of assessment
      for income tax.
      
       118.  It has therefore to be established that the legislation at issue is not required on the basis of one of the grounds listed
      in Article 46 EC.
      
       119.  Consequently, there is no justification for the fiscal legislation at issue.
      
       120.  On the basis of the foregoing, it has to be established that fiscal provisions of the kind at issue in this case are not compatible
      with Article 49 EC.
        VI ─ Conclusion
      
       121.  I therefore propose that the Court answer the question referred as follows:Article 49 of the Treaty establishing the European Communities precludes national rules, like the Finnish rules, under which
      lottery winnings from lotteries held in other Member States are included in the taxable income of the winner on assessment
      to income tax, whereas lottery winnings from lotteries held in the Member State in question are exempt from tax.
      
       1 –
         
           Original language: German.
      
      2 –
         
         Case C-275/92  
             Schindler  [1994] ECR I-1039.
         
      
      3 –
         
         Case C-124/97  
             Läärä  [1999] ECR I-6067.
         
      
      4 –
         
         Case C-67/98  
             Zenatti  [1999] ECR I-7289.
         
      
      5 –
         
         Cited in footnote 2 above.
      
      6 –
         
         Cited in footnote 3 above.
      
      7 –
         
         Cited in footnote 4 above.
      
      8 –
         
         Case C-19/92  
             Kraus  [1993] ECR I-1663, paragraph 32.
         
      
      9 –
         
         Case C-55/94  
             Gebhard  [1995] ECR I-4165, paragraph 37.
         
      
      10 –
         
         Cited in footnote 4 above, paragraph 36.
      
      11 –
         
         Case C-283/95  
             Fischer  [1998] ECR I-3369.
         
      
      12 –
         
         Cited in footnote 2 above.
      
      13 –
         
         Cited in footnote 3 above.
      
      14 –
         
         Cited in footnote 4 above.
      
      15 –
         
         See Case C-275/92, cited in footnote 2 above, paragraph 3.
      
      16 –
         
         See Case C-124/97, cited in footnote 3 above, paragraph 2.
      
      17 –
         
         See Case C-67/98, cited in footnote 4 above, paragraph 2.
      
      18 –
         
         It is settled case-law that the free movement of services includes the freedom for recipients of services to go to another
            Member State to receive a service there, without being obstructed by restrictions. See, among others, Case C-55/98  
             Vestergaard  [1999] ECR I-7641, paragraph 20; Case C-224/97  
             Ciola  [1999] ECR I-2517, paragraph 11; Joined Cases 286/82 and 26/83  
             Luisi and Carbone  [1984] ECR 377, paragraph 16; and Case 186/87  
             Cowan  [1989] ECR 195, paragraph 15.
         
      
      19 –
         
         See among others, Case C-136/00  
             Danner  [2002] ECR I-8147, paragraph 28; Case C-294/97  
             Eurowings  [1999] ECR I-7447, paragraph 32; and Case C-279/93  
             Schumacker  [1995] ECR I-225, paragraph 21.
         
      
      20 –
         
         Case C-275/92, cited in footnote 2 above, paragraph 19.
      
      21 –
         
         See, among others, Case C-131/01  
             Commission  v  
             Italy  [2003] ECR I-1659, paragraph 26; Case C-294/00  
             Deutsche Paracelsus Schulen  [2002] ECR I-6515, paragraph 38; Case C-58/98  
             Corsten  [2000] ECR I-7919, paragraph 33; Case C-272/94  
             Guiot  [1996] ECR I-1905, paragraph 10; Case C-43/93  
             Vander Elst  [1994] ECR I-3803, paragraph 14; and Case C-76/90  
             Säger  [1991] ECR I-4221, paragraph 12.
         
      
      22 –
         
         See, for example, Case C-158/96  
             Kohll  [1998] ECR I-1931, paragraph 35.
         
      
      23 –
         
         See Case C-275/92, cited in footnote 2 above, paragraph 57 et seq.; Case C-124/97, cited in footnote 3 above, paragraph 31
            et seq.; and Case C-67/98, cited in footnote 4 above, paragraph 29 et seq.
         
      
      24 –
         
         See, among others, Case C-294/000 (cited in footnote 21 above), paragraph 39; Case C-424/97 [2000] ECR I-5123, paragraph 57;
            Case C-67/98 (cited in footnote 4 above), paragraph 29 and Case C-55/94 (cited in footnote 9 above), paragraph 37.
         
      
      25 –
         
         See Case C-275/92 (cited in footnote 2 above), paragraph 47; Case C-124/97 (cited in footnote 3 above), paragraph 28; and
            Case C-67/98 (cited in footnote 4 above), paragraph 26. In contrast to  
             Schindler , the national provisions at issue in the latter two cases did not contain a general prohibition on the relevant activities
            in those countries in relation to gambling but reserved those activities for certain (national) bodies. Although such provisions
            inevitably disadvantage foreign service-providers or, in practice, preclude them from engaging in such activity in the territory
            in question, the Court held the provisions to be applicable without distinction, because the restrictions on gambling activities
            in both cases affected all ─ national and foreign ─ economic operators who were  
             not licensed   or could  
             not obtain authorisation .
         
      
      26 –
         
         See Case C-224/97 (cited in footnote 18 above), paragraph 16; Case C-484/93  
             Svensson  [1995] ECR I-3955, paragraph 15; Case C-288/89  
             Collectieve Antennevoorziening Gouda  [1991] ECR I-4007, paragraph 11; Case C-353/89  
             Commission  v  
             Netherlands  [1991] ECR I-4069, paragraph 15; and Case 352/85  
             Bond van Adverteerders and Others  [1988] ECR 2085, paragraph 32. See also my Opinion of 10 October 2002 in Case C-388/01  
             Commission  v  
             Italy  [2003] ECR I-721, point 35.
         
      
      27 –
         
         See Opinion of Advocate General Jacobs in Case C-136/00 (judgment cited in footnote 19 above), paragraphs 40 and 41.
      
      28 –
         
         Case C-136/00 (cited in footnote 19 above), paragraph 32 et seq.
      
      29 –
         
         Case C-388/01 (cited in footnote 26 above), paragraph 19.
      
      30 –
         
         At paragraph 16 of its judgment in  
             Ciola , for example (cited in footnote 18 above), the Court stated that discriminatory measures based on the place of residence
            of the recipient are compatible with Community law only if they can be brought within the scope of an express derogation of
            the Treaty. And at paragraph 21 of its recent judgment in Case C-388/01 (cited in footnote 26 above), it analysed a provision
            that made a distinction according to place of residence to ascertain whether it was justified for overriding public interest
            considerations.
         
      
      31 –
         
         See Case 270/83  
             Commission  v  
             France  [1986] ECR 273, paragraph 18.
         
      
      32 –
         
         See, among others, Case C-353/89 (cited in footnote 26 above), paragraph 15 and Case 352/85 (cited in footnote 26 above),
            paragraph 32.
         
      
      33 –
         
         See above at point 48 et seq. and footnote 25.
      
      34 –
         
         Opinion in Case C-275/92 (judgment cited in footnote 2 above), point 114 et seq.
      
      35 –
         
         See, among others, Case C-388/01 (cited in footnote 26 above), paragraph 19; Case C-436/00  
             X and Y  [2002] ECR I-10797, paragraph 50; Case C-35/98  
             Verkooijen  [2000] ECR I-4071, paragraph 48; Case C-158/96 ((cited in footnote 22 above), paragraph 41; and Case C-484/93 (cited in footnote
            26 above), paragraph 15.
         
      
      36 –
         
         Case C-67/98 (cited in footnote 4 above), paragraph 36, but see also Case 352/85 (cited in footnote 26 above), paragraph 34.
      
      37 –
         
         See Case C-136/00 (cited in footnote 19 above), paragraph 56 and Case C-307/97  
             Saint-Gobain  [1999] ECR I-6161, paragraph 51.
         
      
      38 –
         
         See, for example, Case C-35/98 (cited in footnote 35 above), paragraphs 48 and 56 and the cases cited in the footnote below.
      
      39 –
         
         See Case C-136/00 (cited in footnote 19 above), paragraph 36; Joined Cases C-397/98 and C-410/98  
             Metallergesellschaft and Others  [2001] ECR I-1727, paragraph 69; and Case C-35/98 (cited in footnote 35 above), paragraph 57. 
         
      
      40 –
         
         See to that effect, among others, Case C-100/01  
             Olazabal  [2002] ECR I-10981, paragraph 43; Joined Cases C-34/95, C-35/95 and C-36/95  
             De Agostini  [1997] ECR I-3843, paragraph 55; Case C-55/94 (cited in footnote 9 above), paragraph 37 and Case C-353/89 (cited in footnote
            26 above), paragraph 19.
         
      
      41 –
         
         Case C-67/98 (cited in footnote 4 above), paragraph 33.
      
      42 –
         
         See footnote 25.
      
      43 –
         
         Case C-67/98 (cited in footnote 4 above), paragraph 33.
      
      44 –
         
         See, in that connection, the Opinion of Advocate General Fennelly in Case C-67/98 (judgment cited in footnote 4 above), at
            paragraph 33. 
         
      
      45 –
         
         In the final analysis, money-laundering to any significant degree by lottery players, as compared to lottery organisers ─
            who are therefore as a rule properly subject to the appropriate control or licensing system ─ is likely to be difficult. Finally,
            it is necessary to find vendors of winning ─ foreign ─ lottery tickets for the requisite sum. Secondly, it is unlikely that
            particularly high or ─ even more so ─ frequent wins in games of chance like the lottery would go unnoticed.
         
      
      46 –
         
         See Case C-100/01 (cited in footnote 40 above), paragraph 42; see also Joined Cases 115/81 and 116/81  
             Adoui and Cornuaille  [1982] ECR 1665, paragraph 9. 
         
      
      47 –
         
         Council Directive 77/799/EEC of 19 December 1977 concerning mutual assistance by the competent authorities of the Member States
            in the field of direct taxation (OJ 1977 L 336, p. 15).
         
      
      48 –
         
         See Case C-136/00 (cited in footnote 19 above), paragraph 49; Case C-55/98 (cited in footnote 18 above), paragraph 26; Case
            C-250/95  
             Futura Participations  [1997] ECR I-2471, paragraph 30 and Case C-80/94  
             Wielockx  [1995] ECR I-2493, paragraph 26.