Europe’s top court hits Vatican with €4bn property tax bill
Eno Adeogun Premier Media

Eno Adeogun Premier Media

Europe’s top court has ordered Italy to recover taxes unpaid by Vatican-owned non-commercial properties.

The European Court of Justice’s (ECJ) €4bn judgement on Wednesday covers the years 2006-2011 and will affect Vatican schools, hospitals and other properties.

Previously, Italian law enabled the Vatican and other religious orders to avoid property tax so long as the building in question contained a chapel.

In 2012 the European Commission ruled in favour of a Montessori school based in Rome that argued it faced unfair competition by the untaxed status Vatican-owned schools enjoyed.

However, due to “organisational difficulties” the EU institution said it would not retroactively collect the tax due.

The bill is for unpaid taxes on its Italian hospitals, schools and hotels after a legal ruling by the European Court of Justice.

The judgment covers the five years from 2006 to 2011 when Italian law allowed the Vatican and religious orders to avoid property tax on commercial activities as long as the premises contained a chapel.

The Vatican used the loophole to avoid about €4 billion of tax on hundreds of properties, particularly in Rome where it runs hotels for pilgrims and owns health clinics.

Edoardo Gambero, one of the lawyers that represented the Montessori school in court told news agency ANSA: “This is a historic decision.

“The European Commission must now order Italy to collect the taxes or face infraction proceedings.”

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