Italy May Tax Catholic Church’s For-Profit Property

The government of Prime Minister Mario Monti has announced plans to revise rules on the tax-exempt status of church-owned commercial property.

Though the exemption also applies to other not-for-profit entities, such as trade unions, political parties and religious groups, the Catholic Church is its largest beneficiary.

“Such a move would have been unimaginable six months ago,” said Francesco Perfetti, a history professor at LUISS University in Rome. “After all, no matter whether you are a believer or not, the church is an integral part of Italy’s culture.”

The exemption, introduced in 1992, has sparked a heated debate, especially after the euro crisis and Italy’s staggering debt forced the government to introduce sweeping austerity measures, including a sharp rise in the pension age.

Church officials respond that purely commercial church businesses already pay taxes in full, and that the exemption is aimed at helping social institutions like schools and hospitals, not at giving the Catholic Church an unfair advantage.

“We don’t ask for preferential treatment but just to be treated as other not-for-profit entities,” Cardinal Angelo Bagnasco, president of Italy’s bishops conference, said.