The Western Jerusalem municipality demanded that a Vatican-owned hotel, the Notre Dame of Jerusalem Center, pay overdue city property taxes worth $5 million, and when it didn’t, it placed a lien on the institution’s bank accounts until it settles the payment.
Religious institutions in Israel are exempt from paying property tax. However, in recent years, Israel has sought to come to an agreement with the Vatican that would place Church-owned commercial enterprises — like hotels and coffee shops — under taxation.
The Vatican responded that the hotel hosts Christian pilgrims and therefore no taxes should be collected from it.
But the Jerusalem municipality insisted on issuing monthly bills demanding the taxes. It placed on Monday a lien on the institution’s bank accounts until it settles the payment.
In a statement, the municipality said: “The hotel operates like any other business in the city. The lien was applied after years of the hotel avoiding settling the issue with the municipality, despite repeated requests.”
The Israeli ambassador to the Vatican is trying to resolve the dispute after being briefed about it from sources at the Vatican.
The municipality informed him of the pressure exerted on it by the hotels and store owners in Jerusalem who are paying the tax. They even threatened to file a lawsuit against the municipality at the Supreme Court for discriminating against them.
The Vatican ambassador rejected the claims.
He expressed his concern that the latest step is in line with practices that are against Christians, clergy and holy sites that have increased with the formation of the new far-right government, sources close to him revealed.
