Does the church pay taxes in Russia: expert's answer

2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16

In the news feeds, no, no, yes, there will be information about the mythical budget of the Russian Orthodox Church, about the incredible spending of the Orthodox clergy, about legislation that makes the church practically inviolable. It is not surprising that against this background, many are wondering: "Is the church subject to taxes in Russia?" We will answer it as detailed as possible.

What is the church

To figure out whether the church pays taxes in Russia, let's define what the ROC is essentially from a "business" point of view. Religious organizations in our country are considered full-fledged participants in economic relations - they carry out certain activities, own some kind of property - movable, real estate, land. It is logical that with all this they have the right to be called legal entities.

In addition to all of the above, religious organizations are engaged in specific religious activities - they conduct certain rituals and ceremonies, meetings and events. Art. 8 Federal Law No. 125 "On freedom of conscience and non-religious associations"defines the concept of "church" as follows: a voluntary association of groups of citizens, which is formed for the dissemination of faith and its joint confession, among other things, registered as a legal entity.

Legal framework and church

Let's consider the legal acts, one way or another related to the taxes of the church to the state in Russia:

• FZ No. 7 "On non-profit organizations": the church has the right to engage in entrepreneurship, as well as create a number of its own enterprises and organizations.
• FZ No. 129 "On state registration of individual entrepreneurs and legal entities": the church and its branches are subject to mandatory state registration.
• Federal Law No. 125, mentioned earlier, art. 11: for religious organizations, a special procedure for state registration is implied.
• TC RF, art.3, pp.1: products of religious significance are exempt from VAT.
• Decree of the Government of the Russian Federation No. 251 (2001-31-03): the document contains a complete list of items and services sold by the church and exempt from VAT.
• Agreement on the Importation of Educational, Scientific and Cultural Materials: Imported religious products are subject to taxes no higher than those applied to similar goods in the territory of the host state.

Church income

Does the church pay taxes in Russia and from what income? This is a very interesting question for Russian citizens. We list the main points that make up the profit of a religiousorganizations:

• donations of believers for requests, remembrances;
• donations from patrons, sponsors;
• sale of candles;
• selling books and religious paraphernalia;
• "cup" collection after the service;
• income from the activities of commercial church organizations;
• transfer of a number of church facilities for free use;
• receipts from the state budget of the Russian Federation.

VAT for church

Speaking about what taxes the church pays in Russia, it is necessary to refer to those payments from which the religious organization is exempt or which are deducted to the treasury on a preferential basis. First of all, let's pay attention to VAT - here is a list of the fact that selling directly by the church gives it the right not to pay this 18% tax to the state treasury:

• Objects of religious worship: icons, statues, altars, Calvary, etc., as well as elements that make up an indivisible whole with them: covers, icon frames, chasubles, etc.
• Interior decoration items, architectural elements: iconostasis, tombs, shrines, censers, candlesticks, gates, window bars, thrones, altar cabinets, etc.
• Orthodox paraphernalia: crosses, prayer belts, staves, medallions, standards, banners, wands, amulets, art forms of Easter eggs, etc.
• Necessary elements and substances without which it is impossible to hold a divine service: incense, oil, censers, candles, chrism, instruments for unction, cherubs, seals for prosphora and artos, etc.
• Clerical clothing: robes, belts, handrails,clubs, legguards, phelonies, scarves, aprons, etc., as well as holders, hangers, cases, chains, poles, etc. for them.
• Paper products: liturgical books (Holy Scriptures, prayer books, calendars, notes, rites, religious calendars, etc.), religious and educational books, educational books, official forms and printed goods of religious organizations (letters, diplomas, postcards, messages, prayers, canonical images, photos, etc.)
• Video and audio products of the church: materials that visually teach, enlighten, illustrate elements of doctrine, religious practice, worship, etc.
• Repair and restoration work required for the temple - if carried out by an organization licensed to do so.

It is important to note that the exemption from VAT on the listed items is available not only directly for the church, but also for a commercial company, whose authorized capital is entirely the contribution of a religious association.

Property Tax for Church Organizations

St. 381 of the Tax Code of the Russian Federation exempts the church from paying tax on property, but only in relation to that movable and immovable property that is directly used for religious activities. Church dormitories, buildings for the brethren, etc. will already be subject to this tax in the same amount as for other Russian taxpayers. But there is one thing here: the property tax is regional, which means that in accordance with the Tax Code of the Russian Federation, Art. 12, paragraph 3, subjects canindependently set its size for non-commercial payers. For religious organizations, it is set to zero.

Land tax for the church

Asking about whether the church is exempt from taxes in Russia, let's touch on such an important revenue for the budget as land tax. Plots belonging to the church are exempted from it in two cases - if it has:

• Lands owned by right of perpetual use.

• Territories where temples, churches, chapels, as well as buildings for both religious and charitable purposes were built. The latter include:

  • buildings for the implementation of certain services, prayer, religious buildings, rooms for meetings, rites, ceremonies;
  • pilgrimage centers and hotels for pilgrims belonging directly to the church;
  • religious church organizations - seminaries, theological schools, religious schools and hostels for students;
  • charity canteens, hostels and hospitals, Orthodox orphanages, educational institutions with charitable status, etc.

According to the letter of the Ministry of Finance No. 03-06-02-02/41. the entire land owned by the church is exempted from land taxation, even if there are structures on its territory that are not related to the above. And the Tax Code of the Russian Federation (p. 395, p. 4) reports that land that is the property of the Orthodox Church will be preferential, butwhere buildings and structures of other religious denominations are located.

Continuing the topic "Does the church pay taxes in Russia?" letter of the Ministry of Finance No. 03-05-04-02 / 31 dated May 7, 2008 warns that a site owned by a religious organization, but having on its territory only buildings and structures for the sale of paraphernalia, literature, etc., without the presence of buildings of a religious and charitable purposes, fully subject to land tax.

Religious organization and income tax

Church tax in Russia is also a profit tax. According to the Tax Code of the Russian Federation, Art. 246, paragraph 1, a religious organization is its payer. However, a number of benefits are also provided for her here - the following is not taken into account when compiling the tax base:

• Property (including money) and property rights that came to the church budget in connection with the performance of religious rites and ceremonies, as well as as a result of the sale of their specialized paraphernalia and literature.
• Targeted receipts (except for those related to excisable). This includes:
• donations and contributions;
• property passed by will, inheritance;
• property received for the implementation of statutory activities;
• grants from individuals and organizations included in the List of Government Decree No. 485 (28.06.2008).

Targeted receipts are not taxed only if they were spent strictly for their intended purpose - to the tax authoritythe church must provide a detailed report.

Church taxes

Does the church pay taxes to the state in Russia? 91% of those who are interested in this issue cannot find what is taxed from the activities and property of the church. The religious organization pays the following:

• Vehicle Tax: All vehicles operated by the church are taxed at the same rate as other taxpayers.
• Excisable duties (TC RF, art. 181): cosmetics and perfumes, alcohol-containing substances, medicines, prophylactic products, etc. Note that jewelry, including those sold by the church, is not excisable element.

So, does the church pay taxes in Russia? The answer will be yes, but with a number of buts - after all, in the Russian Federation, religious organizations are endowed with a large number of tax benefits.