Vatican Joins Italy’s Tax Evasion Crackdown
The Vatican has signed an agreement with Italy under which the once-secretive city state will share financial information in a bid to stamp out tax evasion.
The deal followed months of negotiations with Rome and will see the Vatican share information on individuals and companies resident in Italy.
Religious institutes banking with the Institute for Religious Works (IOR), previously exempt from paying tax, will now have to do so and include back payments due for 2014.
Buildings owned by the Holy See in Italy – including palaces, basilicas and religious universities granted extraterritorial privileges in the Lateran pact of 1929 – remain exempt from taxes.
“The IOR welcomes the tax accord between the Holy See and Italy,” the bank’s spokesman, Max Hohenberg, said in a statement. “It marks a successful conclusion of the significant efforts carried out over the last months,”
“The accord provides our clients with clarity and safety with regard to their rights and obligations vis-à-vis Italian tax authorities.”
Pope Benedict XVI pledged to wipe out corruption after decades of scandals in which the Holy See’s bank was accused of turning a blind eye to criminal activities such as money-laundering and fraud.
His successor Pope Francis announced a sweeping study of the bank shortly after his election in 2013, creating a special commission to report directly to him before launching a series of reforms.
Last year, the bank blocked the accounts of 2,000 clients and cut ties with around 3,000 others deemed unsuitable.