Tax
No income tax, no VAT, and treaty-based exemptions in Italy
Vatican City State levies no income tax or VAT. It is financed by donations, museum revenue and investment income, while the Lateran Treaty exempts designated Holy See property in Italy from Italian taxation.
Key rules
- No personal or corporate income tax is imposed within the State.
- There is no value added tax, and goods sold in the State are untaxed.
- Designated extraterritorial properties are exempt from Italian taxes and expropriation.
Governing law
- Lateran Treaty, financial and fiscal provisions (1929)
- Monetary Agreement with the European Union (2009)
In practice
The tax exemption applies to designated Holy See property used for its purposes, not to every Church-owned building in Italy, which is a recurring source of confusion.