THE Vatican has received a generous early Christmas present from EU chiefs with the announcement that illegal tax exemption from 2006 to 2011, which saved the Catholic Church billions of euro, will not have to be paid back.
Europe's Competition Commissioner, Joaquin Almunia, said two years ago that the Vatican's exemption from Italian property tax payments on thousands of buildings breached EU competition law. He suggested that the church would have to cough up the missing payments.
But now the European Commission has said that the Italian government had demonstrated that clawing back the missed payments "would be absolutely impossible" given how hard it would be to decide which properties in that period were being used exclusively for commercial purposes.
This year, the Italian government introduced a revised form of property tax which the Commission is satisfied will allow tax breaks only for purely non-commercial buildings. As a result, the church's tax bill will increase – but not by as much as some of its critics would like. (© Independent News Service)