The news from Italy that the Vatican will have to pay property taxes on real estate not directly connected to religious activities has been extraordinary.
According to this excellent article on Concordat Watch, previously Italian law allowed tax exemptions for anything that was deemed “not exclusively commercial”. Thus, by placing a small shrine inside a cinema owned by the Catholic Church, that business then was able to obtain tax-exempt status. The law was so blatantly in favour of the Catholic Church that it prompted calls from the EU commission to investigate the situation and sue Italy. This had been going for some years, but now the financial crisis has finally driven the Italian government to stop protecting the Vatican and the financial benefits could be enormous (even though the details aren’t clear yet).
The annual cost could be up to 720m euros ($945m; £598m) according to municipal government bodies.
Italy’s Catholic Church has 110,000 properties, worth about 9bn euros.