Tax allocation, ecclesiastical tax … this is how religions are financed in European countries

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The separation of the Church and the State and the financing of the religious institution is an open debate that does not seem to end. This cyclical controversy reaches its peak every year in Spain when the time comes for the declaration of income and mark (or not) the famous box. However, resorting to taxes is not the only form of economic cooperation between both agencies.

In Europe, there are two ways of financing religious confessions, as detailed by Alejandro Torres Gutiérrez, professor of Public Law at the University of Navarra, in his publication Financing religions in the European space of the year 2011:

Direct financing: this way implies that it is the State itself that supports, through a budgetary allocation, the different religions, especially those of greater tradition and social roots. This is the case of most countries in the East, Belgium, Greece and Luxembourg. This method also includes the tax allocation , which in the case of Spain is reflected in that controversial box to allocate a percentage of the contribution of each taxpayer in favor of the Catholic Church.

Tax benefits and exemptions are the most common methods of indirect financing. In addition, direct financing includes the ‘ecclesiastical tax’, a tribute created specifically for those taxpayers who want to sustain the Church economically. This fee can be paid directly by the State, as in Denmark or Finland, where bishops and priests receive their salary from the public treasury; or the State Treasury can only serve as a collecting agency , as in Germany.

Indirect financing: benefits and tax exemptions are the most common methods of indirect financing of the Church. For example, tax incentives are granted to individuals or companies that make donations to religious institutions, through deductions from income tax or corporate tax.

“It is the solution that gives least problems from the point of view of the principle of secularity of the State,” says Alejandro Torres. France is the country that best illustrates this way of financing, from the law that was enacted in 1905 and that expressly prohibits the direct financing of religious confessions.

“For a full realization of the principles of secularism, neutrality and separation Church-State, it would be necessary that the models of financing of religious confessions rest on the effort of the faithful and not of the States”, defends the professor.

The Spanish case

Although the Catholic Church has set itself the goal of heading towards self-financing for years, progress towards that goal has been practically imperceptible . “Neither the State has reminded the Church of this commitment, in all this time, nor has it made an effort to mentalize its faithful, why, when it is the State that pays,” says Torres in the study. However, the Spanish Episcopal Conference (CEE) ensures that ” the Church continues taking unequivocal steps to achieve sufficient resources for its support, as established in the agreements.”

The system of direct financing of the Catholic institution in Spain through the tax assignment implies a “reduction of public revenues” . That is, while in countries like Germany, the State collects 100% of the income tax and those faithful who wish can contribute between 8% and 10% extra (the ecclesiastical tax), in our country, the Treasury only stays with 99.3% of the IRPF. The remaining percentage can be allocated to the Church or to social purposes.

So that the Church could self-finance, “each faithful would have to pay 50 cents for each Sunday Mass.” It was in 2006, during the first legislature of Zapatero, when that percentage went up from 0.5% to 0.7% . In return, the Church renounced the money it received from the State through the General Budgets, a reform “balanced” from the point of view of Catholicism.

The collection of this controversial box, which amounted to almost 250 million euros in 2011 , “is destined, together with the rest of the income, to cover the basic needs of the Church, that is, to keep the priests, to carry out the pastoral mission to evangelize and live the faith and attend to the immense assistance work for others, “says Fernando Giménez Barriocanal, deputy secretary general of the Episcopal Conference for economic affairs.

In addition, the Catholic Church enjoys tax exemptions and numerous advantages in matters not only tax. “In Spain there are about 100,000 ecclesiastics who are not obliged to pay the IBI of their homes, ” explains Alejandro Torres, who argues that the system of self-financing of the Catholic Church is viable. “Making an approximate calculation, each faithful would have to pay 25 euros a year, about 50 cents for each Sunday Mass, to cover all expenses,” he says.

“To a lesser extent, the Church is financed with the return of patrimony for the proper purposes of the Church, as well as through services, agreements, etc., in a regime comparable to any other non-profit entity,” they say from the EEC.

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By countries

  • Germany: the Catholic, Evangelical and Protestant churches are financed through the ecclesiastical tax paid by the faithful through the Treasury (about 9% extra of the income tax return). In addition, donations deduct and religious denominations are exempt from some taxes.
  • Austria: applies the same system as the Germans, including tax exemptions for religious charitable organizations (schools, hospitals, etc.)
  • Belgium: the Belgians resort to direct funding from the Catholic, Anglican and Orthodox Church, among others. The State takes charge of the ecclesiastical salaries.
  • Denmark: only the Lutheran Church is financed through the ‘ecclesiastical tax’, the other denominations do not receive any direct financing.
  • France: On December 9, 1905, the French country passed a law that put an end to the funding of religious groups by the State. At the same time, he declared that all religious buildings would be owned by the State and local governments, running the costs of maintenance and repair of those that were built up to that date. Thus, they are financed through donations.
  • The Netherlands: there is no direct financing by the State of religious confessions and donations to churches have tax exemptions.
  • Ireland and the United Kingdom: in both countries the Church does not have a state budget either. The Government only allocates public funds to the “maintenance and conservation of buildings of artistic interest” owned by the ecclesiastical authorities.
  • Italy: the tax allocation amounts to 0.8% of the income tax on natural persons, in addition to tax exemptions for the Catholic Church.
  • Portugal: follows a model similar to the Italian one , although the maximum tax quota that taxpayers can use for religious purposes is 0.5%.

John Bang