European Commission orders Italy to recover unpaid property taxes by the Catholic Church

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The request, which results from a long-standing controversy between Brussels and Rome, could trigger friction between the Vatican and Italy’s new rightist government

The church properties, which include private clinics, hotels, bed and breakfast accommodation and guest houses, for many years enjoyed tax-exempt status as long as part of it was occupied by priests or nuns or had a chapel or prayer room – creating an easy tax loophole.

After a European Commission probe, Italy in 2012 limited the tax exemption to “exclusively non-commercial” structures owned by the Church and other non-profit institutions. Italy would have normally been asked to recover the illegal aid, but the Commission accepted Rome’s argument that its outdated land registry record made it practically impossible.

The Commission said Italy could do it using data from current real estate tax returns, and complement it with other instruments, including self-declarations.

 

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