EC eyes church tax breaks in Italy

Aug. 28, 2007 at 9:13 PM
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BRUSSELS, Aug. 28 (UPI) -- The European Commission is examining tax breaks the Roman Catholic Church receives in Italy, officials said Tuesday.

A spokesman for Competition Commissioner Neelie Kroes said the commission has asked for more information on the church’s tax advantages and has not decided whether to launch a formal inquiry, the Italian news agency ANSA reported.

In 2006, the government of then-Prime Minister Silvio Berlusconi exempted all church property from local real estate taxes. The church also has a 50-percent reduction in corporate income taxes on church business activities.

Although separation of church and state is written into the Italian constitution, the Catholic Church also gets a direct government subsidy. Experts say last year the combination of direct payments and tax breaks cost the government $1.77 billion, adding that much to the revenues of the church.

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