Financing of religions
Direct and indirect subsidies
The constitutional principle of separation implies the absence of public funding for religions. However, Russian law does allow the payment of various subsidies.
Under Article 4§3 of the 1997 law, the state provides exemptions or tax deductions for religious organisations. It also gives financial support to religious organisations to restore, use and protect religious buildings classified as historical monuments.
Under Article 18§3 of the 1997 law, the state provides support for the charitable activities of religious organisations, as well as for cultural projects that they undertake in the interest of the public.
The Tax Code (ch. 21, art. 149§3-1) exempts from VAT sales transactions for goods for religious use and religious literature produced by religious organisations. The list of these items is specified in Ordinance no. 251 of 31 March 2001.
Under Article 251§1-27 of the Tax Code, revenues of religious organisations arising from performing rituals and religious ceremonies and from the sale of religious literature and objects for religious use are exempted from corporation tax.
Under Article 251§2-11 of the Tax Code, donations (including gifts in kind) received by religious organisations to exercise their statutory activities are exempt from corporation tax.
According to the Tax Code (art. 381§2), religious organisations are exempt from property tax on those assets used to perform religious activities.
Under the Tax Code (art. 395 §4), religious organisations are exempt from land tax for lands on which buildings used for worship or charity are located. In circular no. 03-06-02-02/41 of the Ministry of Finance of the Russian Federation of 24 May 2005, it is specified that any land belonging to a religious organisation on which is situated, for example, a place of worship or building used for charitable activities, is exempt from land tax, irrespective of the total size of the land or the existence of buildings of a non-religious vocation on the same land.