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Friday, December 23, 2005

Vatican-Israeli talks hit snag on taxes

Jerusalem, Dec. 23 ( - Negotiations between the Vatican and Israel hit a setback this week, with an Israeli government announcement that Church institutions owe nearly $65 million in property taxes.

For over 10 years, the Holy See and the Israeli government have been engaged in sporadic talks to finalize an agreement establishing the legal and financial rights of Church institutions in the Holy Land. The completion of this pact was promised in the "fundamental agreement" of 1993, which led to Vatican recognition of the Israeli state. Officials in Rome have frequently expressed impatience at the pace of negotiations.

In those negotiations, Vatican representatives are seeking tax exemption for Church-owned properties in Jerusalem. Israeli negotiators argue that buildings should be exempt from taxes only if they are used for religious services-- leaving hospitals, schools, and clerical residences liable for taxation. Both sides have agreed that taxes will not be collected until the questions about exemption have been resolved.

This week, however, city officials in Jerusalem announced that Catholic institutions are liable for nearly $65 million in property taxes. The public announcement seemed to indicate a hardening of negotiating postures as the talks on a legal-financial pact are set to resume.

Representatives of Israel and the Holy See are scheduled to meet again in January for the next negotiating sessions on the permanent agreement. Late in November the two sides had issued a joint statement announcing that significant progress has been made toward a complete pact.

Earlier in November, when Israel's President Moshe Katsav met Pope Benedict XVI in Rome and issued an invitation for the Pontiff to visit the Holy Land, Vatican officials indicated that the Pope was unlikely to make the trip until the diplomatic negotiations had been completed.

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