FEATURES » The Church to pay tax

The Church to pay tax

Under pressure from the European Union Monti’s Government modified the law on tax breaks for profit-making church-owned businesses like hospitals and hostels. Now that the Italian fiscal year has concluded it’s time to work out the new profits coming from the taxation of the church’s properties. The quarrel on whether the church should pay property tax or not is a very old one.

It all changed when the European union classified as illegal state aid tax free properties of the Church in Italy. In order to avoid the heavy fine from the European union for the taxes not paid by the Church on commercial real estates, Monti modified the law and promised to cut taxes thanks to the money that would come from the Church. Even though Monti avoided making any prevision on the amount of money that would have come from the new property tax, the final figure was much lower than what had been anticipated.

The treasury had previously expected to receive an extra 100 million Euros but as the newspaper “Il Fatto quotidiano” reported, the prevision was too optimistic.

Too many loopholes made it easy to avoid the property tax. Only non commercial  activities are exempt for the IMU tax. But it is not so clear how to identify them as they are defined as the ones which charge less than a half of what is foreseen by average for the same kind of activities on the same territory.  But it is not clear who defines the average and how it is calculated.  Hotels and hostels, nurseries and schools in order to be exempted  from taxes have only to demonstrate that they offer their services at a half of the average cost. A quite ambiguous definition. And with an even more ambiguous definition hotels can even pay the property tax just for the time of the year they effectively carry out commercial activity.

According to the newspaper “Il fatto quotidiano” the fiscal blur regulating the non profit activities and church bodies in particular is the way to keep things just as they were. 

By the 4th of February who had benefited from IMU exemptions in 2012 had to deliver a form to state its position (or even a simple change from the previous year). In essence, a kind of first census of who does not pay the property tax, but according to a circular of the Ministry the form to fill in was not available so everyone was exempt from the declaration until the form would have been released, so the whole thing had to be postponed.

In the meanwhile the Vatican declared to have posted a profit of 2.2 million Euros for the Holy See - the governing body of the Catholic Church  and a profit of 23 million Euros for its administration, during this fiscal year, more than 1 million Euros more compared with 2011. 

Giulia Lombardo

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