Spanje weigert BTW te rekenen voor goederenleveranties aan Katholieke Kerk - Commissie start juridische procedure (en)

The European Commission has decided to send to Spain a formal request to bring into line with Community law some tax commitments that it has made under the "Agreement between the Spanish State and the Holy See on economic affairs" of 3 January 1979.

Spain maintains that the Agreement in question obliges it to apply an exemption from Value Added Tax (VAT) to certain supplies of goods made to the Catholic Church. That exemption is not authorised under the European Community VAT system set out in the Sixth VAT Directive (77/388/EEC). The Commission has made it clear that this does not prevent Spain from paying some financial compensation to the Catholic Church in return for taxes the Church has to pay to the Spanish tax authorities.

The request is in the form of a `reasoned opinion' under Article 226 of the EC Treaty. If Spain does not reply satisfactorily to the reasoned opinion within two months the Commission may refer the matter to the Court.

In Spain, supplies of immovable and movable goods related to religious activity that are made by traders to the Catholic Church are exempt from VAT.

There is no provision in the Sixth VAT Directive allowing such exemption and the Spanish authorities have acknowledged this in their correspondence with the European Commission.

However, the Spanish authorities have submitted that the exemption finds its legal basis in the "Agreement between the Spanish State and the Holy See on economic affairs" of 3 January 1979. They argue that this is an international agreement concluded prior to the accession of Spain to the European Community and that the exemption is therefore covered by the first paragraph of Article 307 of the EC Treaty. That paragraph states that rights and obligations arising from pre-accession international agreements concluded by a Member State with a third country are not affected by the EC Treaty.

In response the Commission has pointed out that the second paragraph of Article 307 obliges Spain, to the extent that the Agreement is not compatible with the EC Treaty, to "take all appropriate steps to eliminate the incompatibilities established". This would even, following the case law of the European Court of Justice, include denunciation of the Agreement. Spain has not, so far, taken any such steps.

Furthermore, the Commission notes that the Agreement with the Holy See contains clauses that would entitle Spain to demand an adjustment of its obligations under the Agreement in order to bring them into line with Community Law. First, the Agreement states that "the Spanish State cannot prolong indefinitely legal obligations assumed" with the Holy See. Second, it foresees the adjustment of such obligations if there is "a substantial modification of the Spanish legal order".

This is exactly what took place when Spain joined the European Community and assumed the obligation of complying with Community legislation, the "acquis communautaire".

VAT is a tax that has been harmonised at EU level so as to ensure that goods and services can move freely without hindrance with the Internal Market. The tax is intended to be a neutral tax on consumption that should apply irrespective of the recipient of those goods. The VAT rules oblige a Member State to tax as long as no specific rule allows for an exemption or other derogation from the basic rules. The Commission as guardian of the EC Treaty is obliged to ensure that Member States apply these rules correctly and to take action if they do not do so. Allowing one Member State to depart from the rules in one case would be unfair to other Member States that might wish to do so in other cases. But the Commission has made clear to the Spanish authorities that this does not prevent Spain from preserving the financial end-result by compensating the Catholic Church for some or all of the tax that it might have to pay to the Spanish tax authorities. That would be a matter for Spain alone.
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http://europa.eu.int/comm/secretariat_general/sgb/droit_com/index_en.htm