The EU, tax exemptions for Church schools and the prohibition on State aid

An agreement between Spain and the Vatican dating from before Spain’s accession to the EU provides for various tax exemptions for the Roman Catholic Church. In Congregación de Escuelas Pías Provincia Betania v Ayuntamiento de Getafe C-74/16, the Church, relying on that agreement, seeks repayment of municipal tax amounting to €23,000 levied in respect of building work on La Inmaculada school, near Madrid. The building is used predominantly for compulsory education – which is equivalent to the education provided by State schools and the major part of which is financed by public funds – but it is also used for voluntary education, for which the Church charges a fee. The domestic court asked the CJEU for an opinion on the following question:

“Is the exemption of the Catholic Church from the tax on constructions, installations and works contrary to Article 107(1) of the Treaty on the Functioning of the European Union, where the exemption relates to work on buildings intended to be used for economic activities that do not have a strictly religious purpose?” [19]. Continue reading