‘Spain’s Catholic Church tax exemptions may be unlawful aid’

Brussels, June 27 (IANS) Tax exemptions for the Catholic Church in Spain may constitute unlawful state aid if granted in relation to economic activities, the Court of Justice of the European Union (CJEU) said on Tuesday.

The CJUE was ruling on a case presented to the national courts by a congregation of the Catholic Church responsible for a religious school near Madrid, reports Efe news.

The EU court said that educational activities not subsidised by the Spanish state "appear to be economic in character", as they are funded by contributions from students and their families.

"The tax exemption at issue may constitute unlawful State aid if and to the extent to which the activities carried on in the premises in question are economic activities," the court said.

The group had invoked a 1979 agreement between Spain and the Vatican to request a municipal tax return amounting to almost 24,000 euros ($26,860) on "construction, installations and works" in relation to the school hall.

The building is used for "state-regulated primary and secondary education", which is financed from public funds as in the case of state schools, as well as "non-compulsory" education, including early years teaching and extra-curricular activities, which are not publicly subsidised but instead funded by fees.

The EUCJ said it would be left to the national court to decide "to what extent the premises" are used for "such economic activities".

The tax refund was rejected by Spain's tax authorities, who said the activities did "not have a strictly religious purpose".

The court said that although the agreement between Spain and the Vatican predates Spain's accession to the EU, the tax exemption "should not be considered to be existing aid, but new aid", pointing out that Spanish tax on the matter came into effect following the nation's accession.

"Consequently, if the national court were to find there to be State aid, that aid would thus have to be notified to the Commission and could not be implemented without its agreement," the EUCJ added.

(This story has not been edited by Social News XYZ staff and is auto-generated from a syndicated feed.)