ITALY
IMU Law and the Church: no privileges according to the EU
"Non-profit entities play an important social role, which is reflected in the Italian real estate tax regime. However, when they operate on the same markets as commercial players, we need to make sure that they do not benefit from an undue advantage. The new Italian law on the taxation of real estate ensures that this is not the case". Joaquín Almunia, Commission Vice President in charge of competition policy, took stock of the EU position on IMU and ICI tax issues, with a word of clarity on a issue that is recurrently addressed in Brussels by commercial entities and radical political movements. Thus, no tax-exemptions for the Catholic Church but rather a fair acknowledgement of the educational, religious and third sector activities carried out by parishes, associations and Church bodies. In a release issued yesterday the EU Commission points out: "The Commission found that IMU is in line with EU state aid rules", adopted to protect the single market and fair competitiveness, "since it clearly limits the exemption to premises where non-economic activities are carried out by non-commercial entities". To shed light on the issue, it is necessary to refer to the statement released in Brussels that goes on: "The European Commission has found that the former Italian system of municipal real estate tax exemptions granted to non-commercial entities for specific purposes (ICI) between 2006 and 2011 was incompatible with EU state aid rules". However, "After the Commission opened an in-depth investigation in October 2010, Italy amended the system and has now adopted a new municipal real estate tax law (IMU), which does not involve state aid since exemptions will only apply to premises where non-economic activities are carried out". "The Commission has therefore closed its investigation". Stop the controversy, along with services for citizens offered by the Catholic world: oratories, schools, charitable activities and sports, in addition, of course, to the religious functions.The President of the Italian Bishops’ Conference card. Angelo Bagnasco, said that the Italian tax system doesn’t envisage a "special privilege" while the clarifications arriving from the EU Executive are an "act of justice". "As we often said – the Cardinal added – the Church has always paid the dues on its commercial activities, under the previous and the current legislation alike". "The fact that Europe has recognized the new legislation, developed by the Italian government is an act of great fairness, common sense regarding the presence of the Church and of non-profit activities in general in recognition of all charitable activities". As relates to exemptions for the period 2006-2011, the College of Commissioners led by José Manuel Barroso, "does not order Italy to recover the aid from the beneficiaries because the Italian authorities have demonstrated that, in this specific case, recovery would be absolutely impossible". The Italian authorities demonstrated that "it would be objectively impossible to determine which part of the real estate belonging to non-commercial entities was used exclusively for non-economic activities". Cardinal Bagnasco welcomed with deep satisfaction the impossible recovery of the aid from the beneficiaries, which "far from being a special privilege is an act of fairness".