Under pressure from the European Commission and Italy's government, a Vatican spokesman has said that the Italian Catholic Church is willing to "revisit" the issue of the benefits it receives from tax exemptions and from government payments. Today's Guardian reports that renegotiation of the 1984 version of the Concordat between the Vatican and Italian government is needed because the Italian treasury loses 1.3 billion Euros each year from a combination of the Church's receipt of income tax monies, its exemption from most local property taxes, and the reduced tax rate on its business activities (schools, hospitals, clinics and hotels). The EU has suggested that the Church's tax treatment in Italy may pose unfair business competition issues.
UPDATE: BNA Daily Tax RealTime reported on Aug 28: "The European Commission has taken the first steps toward a possible official illegal state aid case against Italy and the Catholic Church by requesting that Italian government authorities provide information about a range of tax breaks the Vatican receives for various economic activities."
