Czech Constitutional Court cancels taxation of restitution paid to churches

Brno, Oct 15 (CTK) – The Czech Constitutional Court (US) opposes the taxation of the financial compensation churches get for their property confiscated by the Communists that cannot be returned in the restitution process and it has cancelled this legal provision, US judge rapporteur Jaromir Jirsa said today.

The US thus complied with the complaint by a group of senators who challenged the additional taxation earlier this year.

The US said that the “taxation,” i.e. additional reduction of the financial sum compensating for the wrongs caused by the criminal communist regime went counter to the basic principles of a democratic law-abiding state.

The taxation was actually no genuine taxation but rather a reduction of the compensation sum to which the churches became entitled by signing their property settlement deals with the state based on the restitution law, Jirsa said, adding that the taxation was not motivated by an honest intention to fill the state coffers.

No other group of post-1989 restituents saw the state retrospectively challenging their restitution rights, Jirsa said.

Furthermore, besides its restitution purpose, the financial compensation has another role – it should prepare churches and religious groups for their future financial separation from the state. Churches have been providing a number of healthcare and social services the state is impossible to secure by itself, Jirsa said.

The legislation imposing a tax on the church compensations as of 2020, proposed by the Communists (KSCM), was pushed through by the government coalition of PM Andrej Babis’s ANO and the Social Democrats (CSSD) with support of the KSCM and the anti-EU far-right Freedom and Direct Democracy (SPD) in the Chamber of Deputies in April, overriding a veto of the Senate, the upper house controlled by the opposition.

President Milos Zeman signed it into law on May 2.

Shortly afterwards, a proposal to cancel the controversial taxation was submitted this spring by about 40 senators from the opposition Christian Democratic Union (KDU-CSL), the Civic Democratic Party (ODS) and other Senate groups, and they were later joined by another 19 opposition senators and 62 opposition deputies.

The restitution law (law on the property settlement between the state and churches) was pushed through by the rightist government of Petr Necas (2010-2013) and it took effect in January 2013.

Based on it, 16 churches have been returned property worth 75 billion crowns, which was seized by the Communist regime in 1948-1990, and are to receive 59 billion crowns plus inflation in the next 30 years as compensation for the property that cannot be returned to them. The money has been gradually paid to them since 2013. Simultaneously, the state subsidies to churches have been decreasing step by step until 2030 when they will cease to be paid altogether.

The US has deleted only a few words from the restitution law amended in April, but in doing so, it cancelled the taxation of the financial part of the church restitution.

Without the US’s intervention, the financial compensation would have become subject to a 19-percent tax as of January 2020.

Out of the 14 US judges, Josef Fiala and Radovan Suchanek’s positions on the restitution compensation case differed from the majority position.

hol,rtj/dr