FEATURES » EC to fine Italy for failing to tax Churches?

EC to fine Italy for failing to tax Churches?

Just a few days ago the “Consiglio di Stato” rejected the decree of the “Ministero del Tesoro” on taxation of some of the Church’s properties.

In 2010 the EU investigated on whether tax free properties of the Church in Italy could be classified as illegal state aid.

The European Commission, is going to heavily fine Italy for the taxes not paid by the Church on commercial real estates. 

The fine could be suspended if the state, by the end of 2012, issues decrees to make the Church pay.

Since 2005, during Berlusconi’s Government the exemption from the payment of the ICI tax (now called IMU) which already included cult sites, has been extended to buildings used for assistance, charity, instruction education, culture, set up in the form of a business, if connected to religious activities.

In 2007 Prodi’s Government introduced the exemption for “not purely commercial activities”, that didn’t solve the problem because the presence of a chapel in the building was enough for the building to be considered a religious site instead of a commercial one.

Among the reasons for which the decree of Monti’s Government has been rejected is that the Government has taken upon itself initiatives not foreseen by the law: instead of just giving clear guidelines for calculating the parts of the buildings where commercial activities take place, they have given a too vague and not homogeneous criteria to establish what could be exempted from taxation and what could not.

According to what the newspaper “Repubblica” reported the Vatican saves about 6 billion every year by not paying taxes on commercial activities.

In short, religious bodies operators of hotels, restaurants, nursing homes, hospitals, tourist agencies, swimming pools, etc… provided they have a few prayer spaces, don’t pay the IMU tax, as well as taking advantage of a huge tax reduction on profits from these activities.

To understand the dimensions of the problem it may be sufficient to know that the Vatican has properties that generate a turnover of approximately 4 billion a year from private schools, hospitals, gyms and hotels run by religious orders and foundations. There are about 100 000 buildings, but could be more. A fifth of Rome has been estimated to be property of the Vatican. In the Lazio region there are 140 accredited private nursing homes, 800 schools, 65 nursing homes, 43 boarding schools, 20 nursing homes and much more.

The situation is not so different in many other parts of Italy, for example, in Milan, the private schools are more than 450 and clinics are 120. The only assets of Propaganda Fide amounts to 8-9 billion.

Then there is the religious tourism: 200.000 beds throughout Italy with 3.300 addresses between holiday homes and hotels for pilgrims.

It seems very unlikely that the present Government will be able to solve this problem within this legislation.

Giulia Lombardo

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