No, no, yes, information will appear on the Russian Orthodox Church’s mythical budget, on the incredible expenditures of the Orthodox clergy, on legislation that makes the church almost untouchable. No wonder that against this background, many are asking the question: "Is the church taxed in Russia?" We will answer it as detailed as possible.
What is a church?
To find out if the church pays taxes in Russia, we will determine what the Russian Orthodox Church essentially is 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 any property - movable, real estate, land. It is logical that for 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 rites 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 that is formed to spread the faith and practice it together, among other things, registered as a legal entity.
Legal framework and church
Consider legal acts, one way or another related to church taxes to the state in Russia:
- Federal Law 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.
- Federal Law No. 129 "On State Registration of Entrepreneurs and Legal Entities": the church and its branches are subject to mandatory state registration.
- The Federal Law No. 125, Article 11, mentioned earlier: for religious organizations, a special procedure for state registration is implied.
- Tax Code, Article 3, paragraph 1: products of religious significance are exempt from VAT.
- Decree of the Government of the Russian Federation No. 251 (03/31/2001): the document contains a complete list of items and services sold by the church and exempted from VAT.
- Agreement “On the Importation of Educational, Scientific and Cultural Materials”: imported religious imported products are taxed no higher than those that apply 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 religious organization:
- donations of believers for the requirements, commemoration;
- donations from patrons, sponsors;
- sale of candles;
- sale of books and religious atibutics;
- "circle" collection after service;
- income from the activities of commercial church organizations;
- transfer of a number of church facilities for free use ;
- revenues from the state budget of the Russian Federation.
VAT for church
Speaking about what taxes the church pays in Russia, it is necessary to touch on those payments from which the religious organization is exempt or which it deducts 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 on state treasury:
- Religious objects of worship: icons, statues, altars, Calvary, etc., as well as the elements that make up an indivisible whole with them: covers, icon frames, vestments, etc.
- Interior decoration items, architectural elements: iconostases, tombs, crayfish, censers, candlesticks, gates, window bars, thrones, altar cabinets, etc.
- Items of the attributes of the Orthodox religion: crosses, prayer belts, staves, medallions, standards, banners, wands, incense sticks, art forms of Easter eggs, etc.
- Necessary elements and substances, without which it is impossible to conduct a service: incense, oil, censer, candles, miro, devices for churching, cherubs, seals for prosphora and arthos, etc.
- The clothes of clergymen: mantles, belts, handrails, clubs, leggings, felons, scarves, aprons, etc., as well as holders, hangers, cases, chains, shafts, etc. for them.
- Paper products: liturgical books (Holy Scripture, prayer books, clergy, notes, rites, religious calendars, etc.), religious-educational, educational books, official forms and printed materials of religious organizations (letters, diplomas, postcards, messages, prayers, canonical images, photos, etc.)
- Video and audio production of the church: materials that clearly teach, educate, illustrate the elements of teaching, religious practice, worship, etc.
- Repair and restoration work necessary for the temple - if they are carried out by an organization licensed for such activities.
It is important to note that exemption from VAT on the above items is available not only directly to the church, but also to a commercial company whose registered capital is entirely the contribution of a religious association.
Property Tax for Church Organizations
Art. 381 of the Tax Code of the Russian Federation exempts the church from paying property tax, but only in relation to that movable and immovable property that is directly used for religious activities. A church dormitory, a corps for a fraternity, etc., will already be subject to this tax in the same amount as for other Russian taxpayers. But there is one thing here: property tax is regional, which means, in accordance with the Tax Code of the Russian Federation, Art. 12, p. 3, entities can independently determine its size for non-profit payers. For religious organizations, it is made equal to zero.
Church land tax
When asking about whether the church is exempt from taxes in Russia, we will touch upon such an important revenue for the budget as land tax. Parcels belonging to the church are exempted from it in two cases - if it has:
- Land owned by perpetual use.
- Territories on which temples, churches, chapels are built, as well as structures of both religious and charitable purposes. The latter include:
- buildings for the implementation of certain services, prayer, religious buildings, premises for meetings, ceremonies, 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, dormitories and hospitals, orphanages, educational institutions with charitable status, etc.
According to the letter of the Ministry of Finance No. 03-06-02-02 / 41. the entire parcel belonging to the church is exempted from land taxation, even if on its territory there are structures 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, but on which the buildings and structures of other religious denominations are located, will be preferential.
Continuing the theme "Does the church pay taxes in Russia?" The letter of the Ministry of Finance No. 03-05-04-02 / 31 of May 7, 2008 warns that the site belonging to a religious organization, but having on its territory only buildings and structures for the sale of paraphernalia, literature, etc., without the presence of religious buildings and charitable purposes, fully taxed by land tax.
Religious Organization and Income Tax
Church tax in Russia is also a profit tax. According to the Tax Code, Art. 246, paragraph 1, a religious organization is its payer. However, a number of benefits are also provided for her here - when drawing up the tax base, the following is not taken into account:
- 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.
- Target revenues (except those that are excisable). These include:
- donations and contributions;
- property transferred by will, inheritance;
- property received for the implementation of statutory activities;
- grants from individuals and organizations included in the List of Government Decision No. 485 (June 28, 2008).
Targeted receipts are not taxed only if they have been spent strictly for their intended purpose - a detailed report is necessarily submitted to the tax authority by the church.
Church Taxes
Does the church pay taxes to the state in Russia? 91% of those interested in this issue cannot find what is taxed on the activities and property of the church. Religious organization pays the following:
- Transport tax: For all vehicles administered by the church, tax is paid in the amounts that are applicable to other taxpayers.
- Excisable taxes (Tax Code, Article 181): cosmetics and perfumes, alcohol-containing substances, medicines, prophylactic agents, etc. Note that jewelry products, including those sold by the church, are not excisable.
So, does the church pay taxes in Russia? The answer will be positive, but with a number of but - after all, in the Russian Federation religious organizations are endowed with a large number of tax benefits.