The EU is holding Italy's
feet to the fire to make the Catholic Church pay property tax. Sources serving EU Competition Commissioner Joaquin Almunia said on Monday that an infraction case remains open against Italy for failing to address property-tax exemptions enjoyed by the Church.
The EU made its position known after Italy's highest administrative court, the Council of State, scuppered a decree by the Italian government intended to resolve the issue of the Church not having to pay the tax, which earlier this year reappeared in a new form called IMU.
In February, Italy's technical government, led by Premier Mario Monti, formulated an amendment to Italian property-tax law that would terminate the Catholic Church's historic exemption.
The amendment was intended to close an inquiry made by EU anti-trust authorities dating back to 2007, and reopened in 2010 after complaints filed by Maurizio Turco, a representative of Italy's civil liberties-oriented Radical Party, and the tax expert Carlo Pontesilli, who turned to the European Court to prevent the case from being archived.
The EU holds that tax breaks received by the Catholic Church could be considered illegal state financial aid.
The EU's antitrust authority had praised the February decree - now blocked - as "significant progress".
Economy Minister Vittorio Grilli, however, responded to Monday's Council of State ruling by saying that the government was determined "to subject all subjects" to IMU.