Friday, October 05, 2007

Pope says Catholic Church wants no tax privileges

Pope Benedict XVI said Thursday that the Roman Catholic Church does not expect special treatment as EU competition regulators considered a probe into tax breaks it enjoys in Italy.

"The Church does not seek power, does not claim privileges and does not aspire to positions of economic or social advantage," Benedict said as he accepted the credentials of Italy's new ambassador to the Holy See.

"Its only goal is to serve mankind by drawing its inspiration ... from the words and example of Jesus Christ," he said without referring to the potential investigation.

The European Commission said in August that it was seeking information from the Italian government on tax advantages accorded to the Church for its property dealings and that it might open a formal investigation to determine whether they violate EU competition rules.

The Catholic Church is exempt from Italian property tax for its commercial activities, such as those of many Catholic institutions that house pilgrims.

In September, Vatican number two Cardinal Tarcisio Bertone said the debate over the Italian Church's tax advantages aimed to "destroy the credibility of religious institutions."

The European Commission, the European Union's executive arm, is responsible for policing state aid in the 27-nation bloc to see whether it threatens fair competition.

If an investigation finds that state aid is illegal, the Commission can require a member state to recover the money from the beneficiary.

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