Cristiano Blanco and Pier Paolo Fabretti v Agenzia delle Entrate — Direzione Provinciale I di Roma — Ufficio Controlli.
Date: 2014-10-22
24. As a preliminary point, it should be noted that, although direct taxation falls within the competence of the Member States, they must none the less exercise that competence consistently with EU law (see, to that effect, Lindman , EU:C:2003:613, paragraph 18 and case-law cited).
26. In that regard, it must be borne in mind that the freedom to provide services under Article 56 TFEU requires not only the elimination of all discrimination on grounds of nationality against providers of services established in other Member States, but also the abolition of any restriction — even if it applies without distinction to national providers of services and to those from other Member States — which is liable to prohibit, impede or render less attractive the activities of a provider of services established in another Member State where he lawfully provides similar services (see, inter alia, judgment in Dirextra Alta Formazione , C‑523/12, EU:C:2013:831, paragraph 21 and case-law cited).
27. As the Court has already held, the provisions of the FEU Treaty on the freedom to provide services apply to an activity which enables people to participate in gambling in return for remuneration (judgment in Zenatti , C‑67/98, EU:C:1999:514, paragraph 24 and case-law cited). Moreover, the freedom to provide services is for the benefit of both providers and recipients of services (judgment in Liga Portuguesa de Futebol Profissional and Bwin International , C‑42/07, EU:C:2009:519, paragraph 51 and case-law cited).
30. Thus, that national legislation, by restricting the benefit of a tax exemption only to winnings from games obtained in the Member State at issue, makes the provision of services constituted by the organisation of gambling for remuneration subject to different tax arrangements depending on whether that service is carried out in that Member State or in other Member States (see, to that effect, judgment in Laboratoires Fournier , C‑39/04, EU:C:2005:161, paragraph 15 and case-law cited).
31. Moreover, as noted by the applicants in the main proceedings and by the European Commission, a difference in tax treatment, under which only the winnings from games obtained in another Member State are considered to be taxable income, reduces the attractiveness of going to another Member State with the objective of playing games of chance. In fact, the recipients of the services in question, who reside in the Member State where such a difference in treatment prevails, are dissuaded from participating in such games, the organisers of which are established in another Member State, in view of the importance for them of being able to obtain tax exemptions (see, by analogy, judgments in Vestergaard , C‑55/98, EU:C:1999:533, paragraph 21, and Commission  v Denmark , C‑150/04, EU:C:2007:69, paragraph 40 and case-law cited).
32. The fact that gaming providers established in that Member State are taxed as organisers of gambling does not rid the legislation at issue of its manifestly discriminatory character, since that tax is not, as the referring court observes, analogous to the income tax charged on winnings from taxpayers’ participation in games of chance organised in other Member States (see, to that effect, judgment in Lindman , EU:C:2003:613, paragraph 22).
36. As the Italian Government has observed, the Court has repeatedly stated that the legislation on games of chance is one of the areas in which there are significant moral, religious and cultural differences between the Member States. In the absence of harmonisation in the field at EU level, it is for each Member State to determine in those areas, in accordance with its own scale of values, what is required in order to ensure that the interests in question are protected (see, inter alia, judgments in Stanleybet International and Others , C‑186/11 and C‑209/11, EU:C:2013:33, paragraph 24, and Digibet and Albers , C‑156/13, EU:C:2014:1756, paragraph 24).
37. However, although the Court has already recognised a certain number of overriding reasons in the public interest which may justify a restriction on the freedom to provide services, including consumer protection, action against fraud and prevention of social problems linked to gambling, those objectives cannot be relied upon to justify discriminatory restrictions (judgment in Commission  v Spain , C‑153/08, EU:C:2009:618, paragraph 36 and case-law cited).
38. Thus, a discriminatory restriction is compatible with EU law only if it falls under an express derogation, such as Article 52 TFEU to which Article 62 TFEU refers, and which aims to guarantee public policy, public security and public health (see, to that effect, inter alia, judgments in Commission  v Germany , C‑546/07, EU:C:2010:25, paragraph 48 and case-law cited, and Dickinger and Ömer , C‑347/09, EU:C:2011:582, paragraph 79).
39. Consequently, national legislation, such as that at issue in the main proceedings, can be justified only insofar as it pursues objectives corresponding to the grounds of public policy, public security or public health within the meaning of Article 52 TFEU. In addition, the restrictions imposed by the Member States must satisfy the conditions of proportionality. Thus, national legislation is appropriate for guaranteeing attainment of the objective pursued only if it genuinely reflects a concern to attain it in a consistent and systematic manner (see, to that effect, judgments in Engelmann , C‑64/08, EU:C:2010:506, paragraph 35, and Pfleger and Others , C‑390/12, EU:C:2014:281, paragraph 43 and case-law cited).
40. The identification of the objectives in fact pursued by the national legislation is, in the context of a case referred to the Court under Article 267 TFEU, a matter within the jurisdiction of the referring court. It is also for the referring court, while taking account of the information provided by the Court, to determine whether the restrictions imposed by the Member State concerned satisfy the conditions laid down in the Court’s case-law as regards their proportionality (see, to that effect, judgment in Pfleger and Others , EU:C:2014:281, paragraphs 47 and 48 and case-law cited).
41. As regards, first of all, the objectives invoked by the Italian Government relating to the prevention of money laundering and the need to limit the flow of capital abroad or the arrival in Italy of capital whose origin is uncertain, it suffices for the Court, without needing to determine whether those objectives could fall within the definition of public policy, to point out, first of all, that, as is apparent from the Court’s case-law, it is not justifiable for the authorities of a Member State to assume, in a general way and without distinction, that bodies and entities established in another Member State are engaging in criminal activity (see, to that effect, judgment in Commission  v Spain , EU:C:2009:618, paragraph 39 and case-law cited).
44. Finally, it cannot be excluded that action against compulsive gambling falls within the protection of public health (see, to that effect, judgment in Commission  v Spain , EU:C:2009:618, paragraph 40 and case-law cited) and is capable, as such, of justifying a discriminatory restriction on the freedom to provide services.
45. In fact, as the Belgian Government observes, the Court has consistently noted the particular nature of the gambling sector, where, unlike the establishment of free, undistorted competition in a traditional market, the presence of that kind of competition in that very specific market, that is to say, between several operators authorised to run the same games of chance, is liable to have a detrimental effect owing to the fact that they would be led to compete with each other in inventiveness in making what they offer more attractive than their competitors and, in that way, increasing consumers’ expenditure on gaming and the risks of their addiction (see, inter alia, judgments in Pfleger and Others , EU:C:2014:281, paragraph 46 and case-law cited, and in Digibet and Albers , EU:C:2014:1756, paragraph 31 and case-law cited).
46. However, in circumstances such as those at issue in the main proceedings, the taxation by a Member State of winnings from casinos in other Member States and the exemption of such winnings from casinos situated on its territory are not a suitable and coherent means of ensuring the attainment of the objective of combatting compulsive gambling, as such an exemption is in fact likely to encourage consumers to participate in games of chance which allow them to benefit from such an exemption (see, to that effect, judgment in Commission  v Spain,  EU:C:2009:618, point 41).