div CESNURCenter for Studies on New Religions


Scientology is a Religion but Narconon's Profits are not Tax-Exempt, Says Italian Supreme Court (March 1, 2000)

See full text of the decision (in Italian)

In an opinion filed on March 1, 2000 the Italian Supreme Court confirmed that Scientology is a religion under Italian law, but stated that the for-profit activities of Narconon, Scientology's drug rehabilitation branch, are not tax-exempt.
The decision follows the previous Supreme Court decision of October 7, 1997 which stated that Scientology is a religion, rejecting several objection from anti-cult sources. The 1997 decision also examined Narconon's activities, and concluded that they are not illegal. The question whether they are tax-exempt did not arise in the 1997 case.
The new decision confirms that Scientology is a religion, and criticizes narrow criteria "based on the hegemonic paradigm of the'religions of the book' (Christianity, Judaism, and Islam)", which would deny to Scientology its religious status. In this sense, the 1997 decision is affirmed.
The decision also confirms (contrary to decisions of the Court of Milan overturned by the Supreme Court in 1997) that Narconon's activities are not illegal. They are, however, not tax-exempt. The Supreme Court states that it is well possible that Narconon activities are, in turn, religious.
However, the ancillary activities of a religious body, when they involve a profit, are not tax-exempt. There is, the Court says, no religious discrimination against Scientology in taxing Narconon, since ancillary profit-making activities of all religions are taxable under Italian law.
While the Court mentions that Narconon's services are offered against a quid pro quo fee and are profit-making, it stops shortly of discussing whether auditing, the most typical activity of the Church of Scientology, is taxable. In fact, the Italian IRS in decisions about local branches of the Church of Scientology has decided that auditing is not taxable, and the Justice Court of Turin in a final decision came to the same conclusion, thus settling a long battle between the local branches of the Church of Scientology and of the IRS.

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Revised last: 23-03-2000