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Cyprus brokers deal for church to pay land tax
March 14, 2012 / 7:28 PM / 6 years ago

Cyprus brokers deal for church to pay land tax

NICOSIA, March 14 (Reuters) - Cyprus has brokered a deal with its land-rich Orthodox Church which would subject the institution to taxes, settling a dispute festering for years, authorities said on Wednesday.

The Cypriot government and the Church had been at loggerheads over whether real estate transactions of the church were tax-liable.

“I am satisfied with this agreement, which settles a dispute which has existed from the inception of the Republic,” Cypriot Finance Minister Kikis Kazamias told reporters, referring to independence in 1960.

Under terms of the deal, the Church will pay taxes on its real estate transactions.

Cyprus, downgraded to junk by two of the three ratings agencies because of exposure of its banking sector to indebted Greece, has ramped up attempts to bolster shortfalls in revenue and streamline spending.

Past attempts to recoup what the government said were millions in back taxes from the Church stalled after the clergy angrily disputed they owed any money and subsequent admissions from authorities that their calculation methods were wrong.

The Church of Cyprus is an independent branch of the Eastern Orthodox communition and traces its lineage to some of the earliest followers of Jesus Christ.

In addition to considerable real estate amassed largely through bequeathments, it also has a stake in Keo, which produces a popular beer, and in Hellenic, Cyprus’ third-largest bank. (Reporting By Michele Kambas)

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