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EU reviews changes to Italy's tax breaks on Church property

Economy ministry lifts exemptions to comply with Brussels

26 November, 16:55
EU reviews changes to Italy's tax breaks on Church property (ANSA) - Brussels, November 26 - Brussels on Monday was reviewing Italy's new property-tax rules to see if they comply with EU norms by curbing exemptions enjoyed by the Catholic Church.

"We are studying the new measures," said a spokesperson for Joaquin Almunia, competition commissioner. Amid mounting pressure from the European Union, Italy's economy ministry on Saturday changed the property-tax code by lifting exemptions on all income-producing institutions such as Catholic health facilities and Church-owned hotels. The changes go into effect December 31. 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 property tax, known as IMU.

In February, Italy's technocrat government, led by Premier Mario Monti, formulated an amendment to Italian property-tax law that would terminate the Catholic Church's historic exemption.

The amendment was intended to close an inquiry made by EU antitrust authorities dating back to 2007, and reopened in 2010 after complaints filed by Maurizio Turco, a representative of Italy's civil liberties-oriented Radical Party, and tax expert Carlo Pontesilli, who turned to the European Court to prevent the case from being closed.

The EU holds that tax breaks received by the Catholic Church could be considered illegal State financial aid.