Europe: Court of Justice opinions - taxing gains and combatting money laundering

The Court of Justice of the European Union gave judgment today in two cases concerning Spain. In the first, Commission v Spain (C-61/11), the court held that the immediate taxation of unrealised capital gains on the transfer of a company established in Spain of its assets or place of residence to another Member State amounted to a restriction on the freedom of establishment. In the second case, Jyske Bank Gibraltar Ltd v Administración del Estado (C-212/11), the court held that EU law did not preclude Spanish legislation under which credit institutions operating but not established in Spain were required to send directly to the Spanish authorities information necessary for combatting money laundering and terrorist financing. Press releases for both decisions are available: see, respectively, here (pdf) and here (pdf).

Europe: share capital, freedom of establishment and freedom to provide services

The Court of Justice of the European Union delivered its judgment today in Duomo Gpa Srl and Others v Comune di Baranzate and Others (Cases C-357/10 to C-359/10). A copy of the judgment is available here and a summary is available here (pdf). The court held that Italian legislation requiring certain companies awarded contracts to collect local taxes to have a minimum share capital of ten million euros was an unjustified restriction on the freedom of establishment and the freedom to provide services (within Articles 43 and 49 of the EC Treaty, see here (pdf)).

Europe: freedom of establishment and Austrian casinos

The European Court of Justice delivered its judgment yesterday in Case C-64/08 (Criminal proceedings against Ernst Engelmann). The case concerned Austrian legislation which gave the Federal Minister for Finance the power to grant concessions entitling their holders to operate casinos in Austria. The grant of these concessions was restricted to public limited companies with their seat in Austria.

Mr Engelmann, a German national, operated a couple of casinos in Austria without applying for a concession and was found guilty of unlawfully organising games of chance and fined €2000. He appealed to the Landesgericht Linz (Regional Court, Linz, Austria), which referred questions to the ECJ for a preliminary ruling, including whether the Austrian legislation was compatible with European Union Law on the freedom to provide services and freedom of establishment.

The ECJ held - see here (judgment) or here (press release, pdf) - that requiring the company's seat to be in Austria constituted a restriction on freedom of establishment contrary to EU Law: it discriminated against companies with seats in other Member States and prevented them from operating gaming establishments in Austria through an agency, branch or subsidiary. With regard to the argument that such a restriction was justified in the interests of preventing fraud and crime, the ECJ held that the blanket exclusion of companies with seats in other Member States was disproportionate: it went beyond what was necessary to combat crime.