26 July 2021

Garbage tax: Ecclesiastical bodies are also required to pay. The recent pronouncement of the Court of Cassation

In a recent ruling, the Court of Cassation has clarified that ecclesiastical bodies must also pay the waste tax.

The case arose from a tax bill issued by the Municipality of Rome, followed by a notice of administrative detention. These acts had both been delivered to the Pontifical Biblical Institute (hereinafter PBI), for the payment of waste tax (TARI) for the year 2012, amounting to about € 70,000.00.

These acts (the notice and the tax bill) were challenged by the PBI, which felt that its rights had been infringed because the institute is expressly indicated by the Lateran Pacts as one of the subjects exempt from the payment of taxes (art. 16 of the Lateran Pacts).

At this point, before continuing, it is necessary to clarify that under Italian law, in tax matters, there are three possible levels of judgment:

  1. the judge called the Provincial Tax Commission (hereinafter PTC);
  2. the judge called the Regional Tax Commission (hereinafter referred to as RTC);
  3. the Supreme Court of Cassation.

Thus, after the PBI appealed against the tax bill, the first level of judgment began before the PTC. At this first stage, the PBI lost the case, the appeal was rejected and the contested acts – the tax bill and the notice of detention – were confirmed.

This defeat was due to the fact that the PTC did not consider the TARI to be a “tax“, but qualified it as the “consideration” for the waste collection service. For this reason, the exemption mentioned in art. 16 of the Lateran Pacts was not applicable, as the exemption refers only to “taxes”.

This first judgment was appealed by the PBI before the appellate court, the RTC.

And, this time, the Appellate Judges agreed with the PBI: the TARI was no longer classified as a “consideration” (as it had been classified by the Provincial Tax Commission in first instance), but as a “tax”(!).

Thus, for both the PTC (in first instance) and the RTC (in second instance) the issue revolved around the nature of the TARI: for the PTC it is not a tax, whilst for the RTC it is. Consequently, in second instance the PBI won the case.

In fact, since the RTC qualified the TARI as a “tax”, it was possible to apply the rule according to which “real estate […] is exempt from both ordinary and extraordinary TAXES, present and future, both towards the State and towards any other entity, without the need for further and specific exemption provisions” (see art. 6 Law 137/2016, implementing art. 16 of the Lateran Pacts).

The Municipality of Rome, having lost in second instance, appealed to the Supreme Court, thereby initiating the third and final level of judgment.

In this last instance, the decision was further (and definitively) overturned by the Court of Cassation.

The Supreme Court’s reasoning can be summarized as follows:

  • the norms of the Lateran Pacts are norms between two States: the Italian Republic and the Papal State;
  • the Lateran Pacts would not have an immediately “coercive” character but, since they are international law, would have a “programmatic” character, committing the State (Italian or Papal) to introduce them into its own legal system;
  • Therefore, the Lateran Pacts, like the other norms of international law, would not be directly applicable in Italy, but would need to be “implemented” by the Italian State through further laws, in order for the international norms to effectively become Italian “laws”.

The Court of Cassation gives the example of ICI (Municipal Property Tax): the Italian State, by means of specific legislation (Legislative Decree 504/1992, art. 7) has specifically provided for exemption from ICI for ecclesiastical properties.

However, there was no such specific provision for the TARI. 

The lack of a specific provision, according to the Court of Cassation, underlines the difference between the nature of the Tari and that of other taxes (such as ICI).

In fact, it can be said that ICI is a type of tax that concerns the “value” of a given asset (i.e., its ability to produce an income); while TARI does not depend on a value and does not concern an income, but can be considered as a “fee” for the waste collection service.

The fee for waste collection is calculated based on the property’s capacity to produce waste, which in turn corresponds (roughly) to the surface area of the property, rather than the “value” of the property itself.

And it is precisely this last point that was very significant for the purposes of the decision: that relating to the circumstance that the building in question is not a building used for worship. In fact, according to the Municipal Regulation of Rome no. 24 of 2003, article 10, these types of buildings, i.e. those used for public worship, are among those incapable of producing waste due to their nature and characteristics, and therefore their surface area is not calculated for the purposes of TARI.

Therefore, given that:

  • exemption from taxation was explicitly provided for certain types of taxes, but not for the tax known as TARI;
  • the property in question is not used as a place of worship, and therefore must be counted for the purposes of calculating the tax;

the Court of Cassation rejected the claims of the PBI, which is therefore required to pay the waste tax.

Therefore, for Ecclesiastical Institutions it is advisable, in case of doubt about the payment of the TARI, to verify if it is due for the waste collection service (and to which extent). In fact, the Municipality can take action against the Ecclesiastical Body that has been in default up to five/ten years ago (depending on different opinions of the courts), asking for the payment of the TARI plus interest and penalties for non-payment.

Please do not hesitate to email us at info@dikaios.international to review your situation if you have concerns.


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