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Oct 16 2012

Taxing the Church in Italy

The government of Italy was getting ready to issue a new policy subjecting the Catholic Church to property taxes, but now a court in that country has ruled that they cannot do so. Under pressure from the European Union, Italy’s new regulations were to go into effect on January 1, 2013. The EU says they will continue to push for the tax:

The EU is holding Italy’s feet to the fire to make the Catholic Church pay property tax. Sources serving EU Competition Commissioner Joaquin Almunia said on Monday that an infraction case remains open against Italy for failing to address property-tax exemptions enjoyed by the Church. The EU made its position known after Italy’s highest administrative court, the Council of State, scuppered a decree by the Italian government intended to resolve the issue of the Church not having to pay the tax, which earlier this year reappeared in a new form called IMU.

has more details:

The Church owns 20% of the property in Italy. Purely commercial property it owns is already subject to tax. The new law would have expanded taxation to include property that generates profits, but which is now tax free because some percentage of the activities on it are religious, such as a shopping center that includes a chapel.

So under current law, the Catholic Church can open a for-profit business and just put a chapel in it and the whole thing is exempt from taxation. How convenient for them.

18 comments

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  1. 1
    eric

    Our religious tax exemptions might not be that bad. But then again, we have the church claiming private school teachers count as clergy for employment law purposes, because they might occasionally lead prayers – and the US court system agreeing to that.

  2. 2
    holytape

    “Shopping center that includes a chapel….” St. Mary’s of the Blessed Black Friday Sales…..

  3. 3
    Quixotic James

    Reading the original article and doing a little bit (not exceptional) searching on the issue, it sounds like this tax exemption is solely for the Roman Catholic church – i.e. a mosque or Protestant church would not get the same consideration. Am I interpreting that right? If so, then it is a discriminatory law and should be removed.

    Of course, I don’t particularly like *any* church claiming tax exemptions.

  4. 4
    greg1466

    Yes, how convenient? But wait, the Catholic Church owns 20% of Italy? WTF?!?

  5. 5
    Artor

    I hadn’t heard that the EU was pushing for this. I’d thought it was a rare example of sanity emerging in Italian politics. Too bad their court put the kibosh on it- I bet Italy could use the revenue. 20% of ALL Italy? Wow!
    Is the EU pushing for this in the rest of Europe? If not, why not? If so, why haven’t I heard anything about it?

  6. 6
    Bronze Dog

    The new law would have expanded taxation to include property that generates profits, but which is now tax free because some percentage of the activities on it are religious, such as a shopping center that includes a chapel.

    What about a moneychanger in the church?

    Sorry, couldn’t resist.

  7. 7
    Marcus Ranum

    Religion’s already a theme-park.

    I wonder if religious hospitals are the ginormous businesses they are here…

  8. 8
    frog

    I am only mildly surprised by the 20% figure. The RC church is big on land investment, and I’m sure some of their holdings date back 1500+ years. I wonder if that is 20% of everything, or just 20% of the habitable land. i.e., does the church own large chunks of mountain ranges?

  9. 9
    matty1

    Is the EU pushing for this in the rest of Europe? If not, why not? If so, why haven’t I heard anything about it?

    Pushing what? The EU is demanding that an Italian law be altered to match EU standards unless other countries have similar laws there is nothing to push.

    The relevant rules seem to be here and not to have changed since 1974. Briefly the issue is whether the tax system is being used to benefit some businesses over others harming competition, the fact the exempt businesses are owned by the RCC doesn’t seem to be relevant.

  10. 10
    richardelguru

    I’ve thought for a long time that they should charge churches entertainment taxes.

  11. 11
    eric

    I am only mildly surprised by the 20% figure. The RC church is big on land investment

    I’d be big on land investment, too, if I didn’t have to pay property taxes on any of it. That’s a lot of risk I don’t have to assume in terms of land speculation. And think of the rental opportunities; compared to my competitors, I could charge less rent yet still take more off the top in profit.

    Though I guess that’s part of the point; everyone knows this skews the market and land prices, the issue is whether there’s enough political will to fix it.

  12. 12
    dami

    Hi! Italian here. The Church owns schools, hospitals, and hotels – often, former convents/seminaries converted to hotels. Plus, religious people often leave their stuff to the church when they die (this may be due not so much to the pressure of priests as to a honest desire to piss off relatives).
    Italian schools teach Catholic religion, and the State pays the teachers – but it’s the church who selects them.
    The Church gets tax money, both from Catholics and from everyone else – other religions/confessions get some money too, but some (e.g. the Valdesi) only use the money for charitable purposes and publish accounts to prove this.
    I think no other religion has the same tax advantage, but it would be irrelevant since no other religion/confession owns anywhere near as much.
    [PS I suspect 20% refers to tax value, not area - most of Italy is quite inhabitable, the country is full of inconveniently located mountains which tend to be in your way wherever you go.]

  13. 13
    aussieseculardad

    It could be worse. In Australia, commercial for profit companies that happen to be owned by a church pay no taxes of any kind.

    On of our biggest breakfast cereal companies (Sanitarium) has an unfair price advantage as a result.

  14. 14
    sc_770d159609e0f8deaa72849e3731a29d

    Why should the Church be exempt from taxes,when it could evade them, like ordinary Italians?

  15. 15
    Flewellyn

    Yes, how convenient? But wait, the Catholic Church owns 20% of Italy? WTF?!?

    Better than it once was. The Church used to rule 20% of Italy or so, in the form of the Papal States, over which the Pope was directly sovereign.

  16. 16
    laurentweppe

    And you know who’s to blame?

    Berlusconi.
    Because the law is not the result of some medieval custom surviving to this day: It’s a law which was voted in 2005. And the “Not Purely Commercial” clause was added in 2006: Prodi, who was prime minister at the time, tried to rid the country of this law, but his coalition was so fragile, that he was walking on eggs and his government ended up watering down their intent in order to at least pass something.

    ***

    it sounds like this tax exemption is solely for the Roman Catholic church – i.e. a mosque or Protestant church would not get the same consideration. Am I interpreting that right? If so, then it is a discriminatory law and should be removed.

    You’re reading it wrong: the problem is that the italian Catholic church wealth is so enormous compared to the other religious organizations, that most of the exemption goes to it simply because of that.

    ***

    But wait, the Catholic Church owns 20% of Italy?

    By 20% they mean 20% of the value: the italian Catholic doesn’t own 20% of the country’s arable land or 20% of the homes, but when your holdings includes a fuckton of priceless renaissance palaces filled with artpieces, let just say the value is quick to go through the roof.
    And if you really want to faint at numbers: in Rome only, 10.000 testaments are written in favor of the Catholic church every year, and it owns 9.000 schools and 4.000 hospitals in the peninsula.

  17. 17
    CaNNoN

    How deliciously funny! The church stands to be a “force for good in the world” but is unwilling to support the community by paying taxes. I guess it’s only good to give money to the cause of God, not that God should ever contribute to the functioning of society. Of course, we know the mountain of wealth the Vatican is seated upon, from all of their indulgences when you could buy the “right to sin” and of all the people’s the church crushed under their crusades and inquisitions, robbing people of everything, including their lives. But what else would you expect from an organization that made a saint out of Mother Theresa, who took stolen money and never returned it to the poor people from which it was stolen? If there is a God, and this is what it supports, then to hell with said God!

  18. 18
    dingojack

    Matthew 22:15-22
    Dingo

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