Case Note of C-788/18 – Stanleyparma Sas di Cantarelli Pietro & C., Stanleybet Malta Ltd v Agenzia delle Dogane e dei Monopoli UM Emilia Romagna – SOT Parma/ Yu Bingqing

Case Note of C-788/18 – Stanleyparma Sas di Cantarelli Pietro & C., Stanleybet Malta Ltd v Agenzia delle Dogane e dei Monopoli UM Emilia Romagna – SOT Parma/ Yu Bingqing

1.A fundamental freedom involved (what) ：Free movement of services under Article 56 TFEU.

The reason this case involves the free movement of services is that there is a cross-border element, primarily concerning an Italian intermediary providing gambling data transmission services for a Maltese bookmaker. The key issue in this case is whether the intermediary, being taxed under Italian domestic legislation, is subject to discriminatory treatment based on the provision of cross-border services. The core issue here is whether the intermediary is being discriminated against due to providing cross-border services.

Furthermore, the other three fundamental freedoms shall be excluded, according to the CJEU's "center of gravity" approach to determine which freedom is involved in a particular case (Case C-625/17)(i) Free movement of persons: This only applies to natural persons, so it is excluded.(ii) Freedom of establishment versus free movement of services: Using the rule of thumb — permanent versus temporary — the data transmission service provided by the Italian data transmission center to the Maltese bookmaker is a contractual outsourcing arrangement, not a subsidiary of the Maltese bookmaker, so freedom of establishment is excluded.(iii) Freedom of capital versus free movement of services: The Italian data transmission center is not making cross-border investments in the Maltese company but is providing data transmission services across, so freedom of capital is excluded.

2.Discrimination or Restriction to cross-border activities (how/comparability analysis)：No.

To identify if there is a restriction or discrimination, it is crucial to analyze whether there is unequal treatment of similar (=comparable) situations or equal treatment of dissimilar (=incomparable situations), which is the discrimination formulated by CJEU’s general case law. 

2.1 Taxpayer scope：

According to Article 3 of DECRETO LEGISLATIVO 23 dicembre 1998, n. 504, together with the amendment which is Article 1, paragraph 66, letter b) of Law No. 220 of December 13, 2010, the taxpayer for the unified tax is anyone who, even in the absence of a valid license, manages any type of betting or gambling, whether by any means (including electronically), for themselves or on behalf of others (including third parties located abroad). If the activity is carried out on behalf of third parties, the person carrying out the activity and the principal are jointly liable for the payment of the tax and related penalties. So in this case, in terms of the taxpayer level, Italy's single tax on betting and pools does not distinguish between legal persons providing purely domestic services and those providing cross-border services. 

This is why the CJEU ruled that Article 56 TFEU must be interpreted as not precluding the legislation of a Member State that makes data transmission centres (DTCs) established in that Member State liable to a tax on betting jointly and severally with betting operators, their clients, which are established in another Member State, irrespective of where those operators are established and the absence of a licence to organise betting. Specifically, CJEU ruled that Italy's legislation does not violate the principle of the free movement of services. In particular, the Court considered that requiring data transmission centres (DTCs) established in Italy to share tax liability with cross-border betting operators does not constitute unreasonable discrimination against cross-border service providers.

2.2 Tax base

Although CJEU did not address Question 3 raised by the applicant (concerning the tax base), based on the author's review of the relevant regulations for Question 3, the following note is provided: According to Article 1 (643)& (644)(g) of LEGGE 23 dicembre 2014, n. 190, for taxpayers who meet the conditions, specifically those active as of October 30, 2014, who provide gambling with cash winnings, particularly those providing such services for themselves or third parties (including foreign entities), and whose gambling activities are not connected to the national totalizer (managed by the Customs and Monopolies Agency), nor have they gone through the subsequent regularization process, the taxable amount for the unified tax is the taxable amount corresponding to three times the average amount collected in the province where the business or collection point is located. So, in the case of non-compliance with Article 643 of LEGGE 23 dicembre 2014, n. 190, being taxed under Article 644 of LEGGE 23 dicembre 2014, n. 190 based on three times the average amount collected as the taxable amount, this punitive measure does not differentiate between entities providing betting-related services to domestic or foreign entities. It only targets those betting operators who were still offering cash-prize after a certain timepoint and who were not connected to the national account.

3.Justification(s) (what)

Since the Court finds that there is no restriction in this Italy's legislation, there is no need to move on to justification or proportionality.

4.Proportionality (how)

Not involved.

Reference:

1. Request for a preliminary ruling from the Commissione tributaria provinciale di Parma (Italy) lodged on 14 December 2018 — Stanleyparma Sas, Stanleybet Malta Ltd v Agenzia delle Dogane e dei Monopoli UM Emilia Romagna — SOT Parma (Case C-788/18), https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A62018CN0788&qid=1761724394286.

2. Judgment of the Court (First Chamber) of 26 February 2020 (request for a preliminary ruling from the Commissione tributaria provinciale di Parma — Italy) — Stanleyparma Sas di Cantarelli Pietro & C., Stanleybet Malta Ltd, v Agenzia delle Dogane e dei Monopoli UM Emilia Romagna — SOT Parma (Case C-788/18), https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A62018CA0788&qid=1761724394286.

3. DECRETO LEGISLATIVO 23 dicembre 1998, n. 504, https://www.normattiva.it/atto/caricaDettaglioAtto?atto.dataPubblicazioneGazzetta=1999-02-03&atto.codiceRedazionale=099G0056&atto.articolo.numero=0&atto.articolo.sottoArticolo=1&atto.articolo.sottoArticolo1=0&qId=&tabID=0.4909964307061705&title=lbl.dettaglioAtto.

4. https://www.normattiva.it/atto/caricaDettaglioAtto?atto.dataPubblicazioneGazzetta=2014-12-29&atto.codiceRedazionale=14G00203&atto.articolo.numero=0&atto.articolo.sottoArticolo=1&atto.articolo.sottoArticolo1=0&qId=&tabID=0.4909964307061705&title=lbl.dettaglioAtto