EU: Italy recovers ICI unpaid by Church and non-profit

Recovery is not required when aid is granted for non-economic activities

The European Commission orders Italy to recover the illegal state aid granted to some non-commercial entities, in particular the Church and non-profit associations, in the form of exemption from the municipal property tax (ICI). The decision, explains the EU executive, follows a 2018 ruling by the Court of Justice, which partially annulled a 2012 Commission decision, which declared the tax exemption incompatible with EU state aid rules, but renounced the recovery of the sums owed.

In December 2012, the Commission ruled that a previous ICI exemption for non-commercial entities engaged in certain social activities of an economic nature between 2006 and 2011 was incompatible with EU state aid rules. However, the Commission did not order Italy to recover the sums from the beneficiaries, because the tax and cadastral databases did not allow their identification. In 2018, the Court of Justice partially annulled the Commission’s decision, holding that it should have assessed whether there were alternative methods for the recovery, even partial, of the aid.

In today’s decision, the Commission acknowledges the existence of difficulties for the Italian authorities in identifying the beneficiaries of the illegal aid. However, for the EU executive, the difficulties are not sufficient to exclude the possibility of obtaining at least partial recovery of the aid. For example, Italy could use data from declarations submitted for the new property tax and integrate them with other methods, such as self-declarations. On this basis, the Commission ordered Italy to recover the aid. Furthermore, the Commission clarifies that recovery is not required when the aid is granted for non-economic activities or when it constitutes de minimis aid, ie of a modest amount.