Russian Church Goers Are Tax Dodgers – Watchdog

A recent court ruling that dispensation of church goods for money is charity and not business implies that millions of church goers are tax dodgers, a consumer rights watchdog said on Thursday.

The Consumer Rights Protection Society earlier sued the Moscow Patriarchate of the Russian Orthodox Christian Church over numerous businesses operating in the Christ the Savior Cathedral in the capital, saying they ignore various regulations for commercial enterprises.

But church representatives claimed in court that the businesses were in fact charities providing free religion-related gifts in exchange for voluntary donations, and therefore exempt from business legislation. A district court accepted the reasoning and threw out the lawsuit on Tuesday.

However, Russian legislation imposes a 13-percent income tax on all gifts upward of 4,000 rubles ($120) received by individuals, the nongovernmental watchdog said on its Web site.

This means those who obtain items in churches without reporting them on income statements violate tax legislation and can face fines and other penalties, the watchdog said.

The Federal Tax Service, which the group requested to comment on the issue, maintained silence on the matter as of Thursday evening, as did church representatives.

The Tuesday ruling was met with much criticism in Russian blogs and media, especially after several journalists reported trying and failing to obtain the allegedly “free gifts” for sums smaller than the “recommended donation price.”

In recent years opposition activists have often accused the Orthodox Christian Church of aligning itself with the secular authorities, endorsing the regime in exchange for various perks. Patriarch Kirill, the head of the church, endorsed Vladimir Putin’s winning presidential bid during last winter’s elections.


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