Mount Athos: Monasteries seek tax exemption for rents, with an appeal to the Council of State

The monasteries of Mountain Athos don’t want to pay tax on the rents they collect from properties they own outside the Athos Peninsula.

By appealing to the Council of State they are seeking a return to the tax regime that was in place before 2010, when their income from rentals outside the region was not taxed.

Of the 20 monasteries operating there, 8 have appealed to the Supreme Court of Appeal. In fact, in a marathon session of the 7-member composition of the second chamber of the Supreme Court, five lawyers representing the monasteries fought a battle of legal arguments to reverse the negative tax regime for them on the rents they collect from their out-of-area properties. The monasteries’ annual income from these leases is far from negligible, as both the hearing and tax returns revealed, and amounts to hundreds of thousands of euros.

The request

It should not be overlooked that no tax is levied on the properties owned by the monasteries within Mount Athos, and an exemption from ENFIA is also provided.

The monasteries are asking for the annulment as unconstitutional and contrary to the Charter of Mount Athos and Greece’s Act of Accession to the European Union and international treaties, etc. the provision of Article 12 of Law 3842/2010, which abolished the tax exemption in force since 1952 (Law 2281/1952) on the income of monasteries from the lease of real estate, land, etc., which they own outside the peninsula and “are neither used nor serve religious purposes, but are intended for economic exploitation”.

The 2010 law provided for the abolition of tax exemptions and in particular the income earned from the leasing of buildings and land by the monasteries of Mount Athos, but also by churches, patriarchates, institutions of foreign religious denominations and charitable institutions. At the same time, it was provided that such leases will be taxed at a rate of 20%.

During the hearing at the Council of State (vice-president Konstantinos Koussoulis presiding and State Counselor Eustathia Skoura as rapporteur), the five lawyers of the monasteries, while developing their arguments, made a legal review of the regime that applied to Mount Athos. They invoked the Treaty of Berlin of 1878, the Treaty of Sevres of 1920, the Constitutions of 1927, 1952 and 1975, etc.

They then focused on their opposition of taxation of such rents, to Article 105 of the Constitution and the 1926 Charter of Mount Athos.

The monasteries that have appealed to the State Council are: 1) Vatopedi, 2) Simon Petra, 3) Zographou, 4) Osios Gregorios, 5) Pantokrator, 6) Philotheos, 7) St. Paul and 8) St. Dionysius (the latter monastery has filed a total of 5 cancellation requests for 5 consecutive fiscal years).

Indicatively listed are the incomes received annually by some monasteries from the lease of real estate (shops, offices, boarding houses), buildings, estates, etc. The data is derived from the income tax returns submitted to the Tax Office of Polygyros and the discussion of these cases in the State Council.

Monastery of Agios Dionysios

The gross income of the Monastery of Agios Dionysios from real estate for the financial year 2014 amounted to 698,907 euros (of which 269,400 are from residences, 152,832 from shops and offices and 276,675 from land), while repair and maintenance costs were declared 508.983 euros. Subsequently, the declaration was cleared, which resulted in tax charges of 77,518 euros (with an attributable tax of 41,089 euros), additional tax of 20,967 euros, stamp duty of 12,885 euros and a contribution to OGA of 2,577 euros.

The gross income from real estate for fiscal year 2013 amounted to 659,711 euros (240,510 euros from residences, 173,616 from shops, offices, etc. and 245,585 from land), while repair and maintenance costs 329,855 euros were declared. A clearance was carried out, which resulted in total tax charges of 94,951 euros, supplementary tax 19,791 euros, stamp duty 12,576 euros and a contribution to OGA 2,515 euros.

The gross income from real estate for fiscal year 2012 amounted to 1,018,431 euros (283,933 euros from residences, boarding houses, etc. 261,166 from shops, offices and 473.331 from land). Main tax 203,686 euros, supplementary tax 31,990 euros and additional tax 4,713 euros were imposed due to the submission of an inaccurate declaration.

The gross income from real estate for fiscal year 2011 amounted to 1,164,725 euros (328,581 euros from houses, etc., 336,744 from shops and offices and 499,400 from land) and the net taxable income was determined at 1,123,223 euros. A main tax of 222,644 euros, a supplementary tax of 34,941 euros and an additional tax for filing an inaccurate return of 36,062 euros were imposed.

For the financial year 2010, a tax of 203,686 euros was imposed on income of 1,018,431 euros, a supplementary tax of 31,990 euros and an additional tax for inaccurate declaration of 4,713 euros.

Monastery of St. Paul

According to the tax return, the annual income of the Monastery of Saint Paul for the financial year 2013 amounted to 554,340 euros (gross 1,189,169 euros) and a tax of 110,867 euros was imposed.

Vatopedi Monastery

According to the tax return of the Vatopedi Monastery, the annual income for the financial year 2013 amounted to 1,159,958 euros. Finally, the Council of State reserved its decisions.

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