Taxation and religious organisations: three French cases at the ECtHR

At the end of January the European Court of Human Rights handed down judgments in three linked cases: Association Cultuelle du Temple Pyramide v France 50471/07 – HEJUD [2013] ECHR 105 (31 January 2013), Association des Chevaliers du Lotus D’Or v France 50615/07 – HEJUD [2013] ECHR 104 (31 January 2013) and Eglise Evangelique Missionnaire and Salaûn v France 25502/07 – HEJUD [2013] ECHR 107 (31 January 2013). The three judgments are available only in French.

 The Religious Association of the Pyramid Temple is a not-for-profit association set up in April 1991 and dissolved in August 1995: its aim was to construct of a “Pyramid Temple of the Unity of Religions” in Castellane in the département of Alpes-de-Haute-Provence. The Association of the Knights of the Golden Lotus is a not-for-profit association set up in 1971 and dissolved in September 1995. Both were dedicated to the practice of a new religion known as Aumism. Following the parliamentary report on cults, Les sectes en France, which was published in December 1995, both associations were subjected to tax audits of their accounts that revealed that they had been receiving direct donations for several years. When the associations refused to declare all their donations, the authorities automatically imposed a tax rate of 60 per cent in accordance with Article 757 of the General Tax Code, which states that direct giving [dons manuels] is subject to gift tax. The associations were also ordered to pay an 80 per cent surcharge. The two associations were obliged to pay sums of more than €2.5 million and €37,000 respectively.

In the case of the Evangelical Missionary Church and its president, Eric Salaûn, in 1997 the local tax office had refused it the exemption granted to religious buildings on the grounds that it did not have sufficient characteristics of an association cultuelle (religious association) in order to qualify for permanent exemption under Article 1342-4 of the General Tax Code. Following an audit of its accounts, the tax authorities decided that the Church could not be classified as a “religious” association for the purposes of claiming the corresponding tax exemptions and it was therefore obliged to pay more than €280,000 on the direct donations revealed by the audit at an automatic tax rate of 60 per cent.

Before the Fifth Section, all three applicants argued that requiring them to pay tax on direct donations infringed their right to manifest and exercise their freedom of religion, contrary to Article 9 ECHR (freedom of thought, conscience and religion). The Association Cultuelle of the Pyramid Temple and the Knights of the Golden Lotus claimed that they had been subjected to different treatment from that meted out to other religious associations. To their knowledge, only five other associations had seen their direct donations taxed following an audit by tax inspectors that had declared the donations to be “revealed” within the meaning of Article 757 paragraph 2 of the General Tax Code.

The Court found that there had been violations of Article 9 in all three cases. The Court reiterated that direct donations were a major source of funding of a religious body and that taxing them might have an impact on its ability to conduct its religious activities.

In Fédération chrétienne des Témoins de Jéhovah de France v France [2001] No 53430/99 (6 November 2001) the ECtHR had previously held that the amount of money demanded from the Jehovah’s Witnesses by the French tax authorities had constituted an interference with their right to manifest under Article 9 because it had the effect of reducing the vital resources of the Association, “which was no longer able to give the faithful solid assurances in the free exercise of their religion,” (laquelle n’était plus en mesure d’assurer concrètement à ses fidèles le libre exercice de leur culte), and that “places of worship were themselves covered ” (les lieux de culte étaient eux-mêmes visés). The tax adjustment applied under Article 757 paragraph 2 of the General Tax Code in force at the material time had been “unpredictable”, especially because the legislation was not sufficiently accurate as to predict whether or not it was applicable to particular legal persons; and a tax audit could be likened to a “revelation” of direct donation. The Court saw no reason to take a different view in the three cases before it and found a violation of Article 9.