An awkward request” “

The European Commission, through a motivated judgement (dictamen), asked the Spanish government in recent days to amend its regime of VAT exemption on the purchase of properties destined for religious worship, to adjust it to EU norms. The Spanish authorities understand that “the legal foundation for the exemption stems from the Accord of 3 January 1979 between the Spanish State and the Holy See, signed before Spain’s accession to the European Community (1986)”. Nonetheless, the Commission has reminded the Spanish authorities that paragraph two of article 307 obliges Spain to “use all appropriate means to eliminate the incompatibilities observed”. If Spain fails to respond satisfactorily to the EU ruling within two months, the Commission could refer the question to the Court of Justice of the European Community. To clarify the terms of the question, SIR interviewed JULIO JIMÉNEZ ESCOBAR , professor of tax law of the Faculty of Economic and Business Sciences at the University of Cordova. “COMPENSATION”, IF NECESSARY. “These VAT exemptions for the purchase of properties destined for religious worship undoubtedly do not conform to EU tax regulations, so it’s not strange that the Commission should request Spain to bring its domestic regulations into line with the harmonized regime for VAT”. In his view, “if the government opts for the elimination of this exemption, the State and Spanish Church would have to reach agreement on a form of compensation for the Church”. In the event of such a “compensatory” agreement between Spanish State and Church being reached, “it would be as well”, according to Jiménez Escobar, “to be aware of the fact that these exemptions can have in many cases considerable economic impact, especially when real estate or properties of high value are purchased”. RESPECTING THE SPIRIT OF THE ACCORDS OF 1979. Moreover, Escobar continues, “the spirit of the Economic Accord between the Spanish State and the Holy See ought to be respected”. This accord is placed in the context of the relations of cooperation between the State and the religious confessions, established by article 16.2 of the Spanish Constitution. “The spirit of that accord – he recalls – is aimed at facilitating the Catholic Church in the creation of places of worship where Spanish citizens may exercise their fundamental right to religious liberty. This is the reason why these exemptions for the purchase of properties destined for religious worship were established in the first place”. AS IN PORTUGAL? If VAT exemptions for Church properties were to be eliminated in conformity with EU requirements, “it would be advisable, by common agreement – explains Jiménez Escobar -, for the Spanish State and the Church to negotiate mechanisms to respect the spirit of the accord”. In this sense “they could seek inspiration from the solutions adopted in Portugal”, where a similar problem has already been posed. It should be borne in mind that in spite of “claims that the ecclesiastical institutions enjoy a situation of tax privilege in Spain”, it’s disputable whether “that’s really the case”. “It’s true that the ecclesiastical institutions enjoy many tax breaks – he explains -, but this regime of benefits is practically the same as that of other non-profit-making bodies. VAT exemption for properties destined for religious worship and a municipal tax on labour are in fact the only exemptions not enjoyed by the foundations and associations of public utility”. The world meeting of families in Valencia Spain is preparing for the 5th World Meeting of the Family (WMF) due to be held in Valencia from 1 to 9 July, with the participation of thousands of delegates. As reported by the FIDES international press agency, the President of the Spanish Bishops’ Conference, Archbishop Ricardo Blázquez, on visiting the city to see for himself the preparations for the meeting, emphasized that “the meeting will do a lot of good for the Church of Spain and for families, as well as for relations between family and Church and vice versa”. He also pointed out that the celebration of this event “provides opportunities for a meeting which undoubtedly will have repercussions on the transmission of the faith within the family; it will help reinvigorate family bonds and the positive aspects that the family can transmit to society as a whole”. After the legislation introduced by the Zapatero Government that have de facto equated marriage with homosexual unions, the Catholic family associations in Spain took to the streets to protest: a million and a half people participated in a protest march on 18 June 2005. The same happened on 12 November when freedom of teaching was at stake. The WMF will be held in this climate of reawakening.