The EU Court of Justice has ordered Italy to annul criteria imposed by Rome on economic operators in order to be entitled to collect local taxes

⁽¹⁾. The court said that the obligation to have a minimum level of share capital, imposed by Italy on potential private operators for this type of concession, constituted a restriction of freedom of establishment and free provision of services, and was not justified by the reasons given by Rome.

Italian law on the reorganisation of local taxes allows provinces and communes to manage their own revenues, including taxes, by means of regulations. Local authorities may choose to entrust the tasks of assessment and collection of taxes to third-party operators, and in such cases these activities are awarded by means of concessions, which comply with EU legislation on the tendering of the management of local public services. The disputed Italian law says that private operators must be entered in a register and must have a fully paid-up share capital of €10 million, whereas companies in which a majority of the share capital is in public ownership are not subject to this condition.

Faced with complaints from companies excluded from tenders on the basis of this condition, the Administrative Tribunal of Lombardy referred the matter to the EU court, which judged this obligation to be incompatible with the EU’s Services Directive, applicable in this case, and more seriously, to be a restriction of the freedom of establishment and provision of services. The judges added that this obligation could not be justified by the need to protect public authorities from possible non-performance by concession holders, and that it is disproportionate to the stated objective.

⁽¹⁾ Cases C-357/10 and C-359/10