The ECJ has ruled that Italian legislation requiring certain companies awarded contracts to collect local taxes to have a minimum share of €10 million is a restriction on the freedom of establishment and the freedom to provide services. The court went on to find that these restrictions of the fundamental freedoms were disproportionate and unjustified.

The judgment in joined Cases C-357/10 to C-359/10, Duomo Gpa Srl and Others v Comune di Baranzate and Others, examined Italian legislation on local taxation which authorises the provinces and municipalities to organise their own taxes. Local authorities may choose to award the assessment and collection of taxes to third party operators, which is permitted under EU law. However, private companies seeking to carry out those activities must have fully paid-up share capital of €10 million, whereas publicly owned companies are not subject to that condition. The ECJ found that the condition placed on private companies of having fully paid-up share capital of €10 million amounts to a restriction on freedom of establishment and freedom to provide services which is disproportionate and unjustified.

For full details of the case see http://curia.europa.eu/jcms/upload/docs/application/pdf/2012-05/cp120061en.pdf