(Adds details, background)
BRUSSELS Dec 19 Italy won EU regulatory
approval on Wednesday for a new property tax scheme, which
stripped the Catholic Church of its exemption from local
property taxes on its real estate used for commercial purposes.
Italian authorities implemented the new real estate law
(IMU) in January this year, after the European Commission said a
two-year investigation into the case showed tax breaks allowed
under a previous scheme breached EU state aid rules.
The Commission, which acts as EU competition authority, said
it had received a number of complaints that the exemptions gave
some companies an unfair advantage.
The Italian church owns a vast portfolio of properties,
which includes private clinics, hotels, bed and breakfast
accommodation and guest houses, which have enjoyed tax-exempt
status if part of the building was occupied by priests or nuns
or had a chapel.
That created a grey area where many essentially commercial
structures benefited from the religious exemption law.
"When (non-profit entities) operate on the same markets as
commercial players, we need to make sure that they do not
benefit from an undue advantage," EU Competition Commissioner
Joaquin Almunia said in a statement, approving the revised
EU competition regulators said the new law complied with
state aid rules in the 27-member European Union.
The legislation was part of a package of emergency budget
measures introduced when Prime Minister Mario Monti's technocrat
government took power last year and amid increasing calls for
the Vatican to share sacrifices needed to deal with the debt
Estimates on how much the new scheme will bring the Italian
government range from about 700 million euros to more than 1
(Reporting by Foo Yun Chee; editing by Rex Merrifield and