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EU body approves taxes on commercial Church-affiliated institutions in Italy

Catholic World News - December 20, 2012

The European Commission, which functions as the executive cabinet of the European Union, has approved Italy’s decision to tax Church-affiliated institutions that engage in profit-making activities.

“When (non-profit entities) operate on the same markets as commercial players, we need to make sure that they do not benefit from an undue advantage,” the EU competition commissioner said.

Such activities, according to the Reuters news agency, include “private clinics, hotels, bed and breakfast accommodation and guest houses, which have enjoyed tax-exempt status if part of the building was occupied by priests or nuns or had a chapel.”

Such activities fell under an Italian property tax exemption between 2006 and 2011; the new law took effect on January 1.

The European Commission ruled that the prior tax exemption in force until 2011 constituted illegal government aid but also decided that the Catholic institutions did not have to pay back taxes--a decision welcomed by Cardinal Angelo Bagnasco, president of the bishops’ conference.

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