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.
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.