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Financing of Churches

Public Financing of Churches

After 1989 new legislation enabled churches and religious communities to have full internal self-government, but it did not eliminate their direct financial dependence on the state.

Act no. 218/1949 Col. on financial provision for churches and religious communities, much amended, eliminated a discriminatory approach and state control over the churches, but still maintains a paternalistic approach to the churches in the filed of finance. By means of the act, the communist state imposed a unified form of direct state subsidy on churches and religious communities. The subsidy should have superseded the whole spectrum of individually differentiated traditional sources of income. In the period between 25 February 1948 and 1 November 1949 when Act no. 218/1949 Col. came into force, a crucial part of the churches’ productive property was nationalised without redress, especially by means of a unilateral implementation of Acts on land and agrarian reforms. Restitution of church property is one of the processes enabling churches to start working towards economic independence.
On the basis of Federal Act no. 298/1990 Col. on the regulation of some property relations of monastic orders and congregations and the Olomouc archbishopric as spelt out in Act no. 338/1991 Col., some property of monastic orders and congregations was returned. In the territory of the Slovak Republic, 95 monasteries were involved. Act no. 282/1993 Col. on the mitigation of some of the legal injustices to property caused to churches and religious communities enabled some ownership rights to be restored. This related to movable and immovable things of which churches and religious communities were dispossessed on the basis of decisions of the state bodies, civil law and administrative acts issued in the period between 8 May 1945 –2 November 1938 in the case of Jewish communities - and 1 January 1990. Act stipulated that proceedings relating to the surrender of immovable things be exempt from administrative and court fees, and compensation for costs connected with the geographical location of surrendered real estate must be provided by the State. Act no. 97/2002 Col. amending Act no. 282/1993 Col., added to the property to be restored lands that are the part of the forest land in national parks .

At present, on the basis of Act no. 218/1949 Col. and its amendment by Act no. 522/1992 Col., the State must provide churches and religious communities with funds for payment of their clergy stipends (including contributions to social and health care funds and the employment fund), if churches and religious communities so request. Churches and religious communities that were provided with personal benefits for their clergy up to 31 December 1989 are not obliged to do this. Four subjects of the total of 16 registered churches and religious communities (Religious community of Jehovah’s witnesses, Christian congregations, Church of Seventh Day Adventist, New Apostolic Church) do not exercise their claim for contributions. The classification and levels of clergy stipends are regulated by SR Government decree (Government order SR no. 578/1990 Col. as amended by Government order no. 187/1997 Col.). The State contributes to the operation of headquarters of registered churches and religious communities. The Ministry of Culture SR is the administrator of financial support that the National Council SR assigns for churches and religious communities. Through the church department it remits each month assigned funds to each church headquarters. The national budget sets contributions also to the Slovak Catholic Charity and Protestant Diakonia. The State may make financial contributions of up to the 80% of the purchase price for the installation of electronic security devices designed to protect sacral culture treasures.
All proceeds of church collections, income for church activities, and regular contributions of registered churches’ and religious communities’ members are tax exempt. The value of gifts provided for humanitarian, charitable and religious purposes of registered churches and religious communities may be deducted from the taxable income of natural persons and legal entities to the amount stipulated by the act. Lands forming one functional unit with the building or part of a building which is used for the performance of religious ceremonies, and with the whole or part of a building which serves as offices for persons commissioned for church administration, are exempt from land tax. Lands where cemeteries are founded are also exempt from land tax. Buildings and those parts of them serving exclusively for the performance of religious ceremonies or as the offices of church administrators are exempt from the tax on buildings. Legacies and gifts earmarked for the development of registered churches and religious communities are exempt from inheritance tax. Under conditions stipulated by Ordinance no. 17/1994 Col. religious objects and gifts for churches and religious communities are exempt from import duty.
On the basis of Section 48 of Act no. 366/1999 Col. on tax on earnings, as amended by later regulations, each taxpayer is entitled to remit, through the tax administrator, a sum of money equivalent to 1% of his or her income tax to one of the specified legal entities among which are agencies of churches and religious communities. Additionally, churches and religious communities as well as entities with legal personality derived from them, may apply for various grants and subsidies. Churches apply for grants towards the preservation and recovery of cultural landmarks that are in their ownership as well as for social, charitable, educational and cultural projects.

Since 2000, work has been in progress towards the goal of a new model of financial provision for churches and religious communities. In 2001 the Ministry of Culture submitted Bill on financial provision for churches and religious communities. Bill preserves the principle of the existing model, but with the difference that financial means provision takes into account the number of members of each church and religious community and specific conditions of their activity in relation to their size. Bill passed through the legislative process up to being discussed by the National Council SR plenary. However, it was removed from the agenda on the proposal of one of the deputies, and up to now it has not been put back. A broad consensus of churches and religious communities, ministries, political parties, and other involved society constituents, seems to have foundered again.

D 3 October 2012    AMichaela Moravcikova

CNRS Unistra Dres Gsrl

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