Church Autonomy and Taxes in Austria

Today is the deadline for filing an electronic tax return here in Austria, but you’d hardly know it because most tax payers, i.e., employed persons, are not required to file at all: declaring and withholding income and social security taxes are employer responsibilities. As a result, most people don’t file a return; if they do, it is to claim one or several of a limited number of deductions. If members of the Church bother to do it, they will be able to deduct a portion of their tithing—currently capped at EUR 400/year—and that’s about it as far as charitable contributions to the Church are concerned. But fifteen years ago, a local member of the Church blazed the way for an additional deduction related to missionary service.

Of interest, I hope, for an international audience is the way the Church in Austria has defined missionary service as vocational/professional training, which allows members whose children serve missions to claim income tax deductions and retain entitlements (more on entitlements in a future post).

Some background before we proceed. Austria’s legal system is in principal religiously neutral—the state does not identify with a specific church or religious community—and secular—its tasks and objectives are exclusively worldly and non-spiritual. These principles of neutrality and secularity allow a tiny religious minority like Mormonism to, well, if not flourish at least maintain a place at the table.

Freedom of conscience, confession and creed are guaranteed for all, but the state does reserve the right to grant churches and religious communities legal personality under public law, which makes (recognized) churches and the state “partners on an equal footing, each acknowledging the independence and autonomy of the other.” (Source) If you are a member of a non-recognized church, you may worship more or less as you please, but you will not be a partner on equal footing.

In the case of The Church of Jesus Christ of Latter-day Saints, the state’s counterpart is not Salt Lake City but a local Church Council comprised of a president (one of two stake presidents in Austria), two counselors (the other stake president and a commissioner for interfaith issues) and three other members, one a commissioner for schools and education (a CES guy) and the other two without a portfolio. As far as the state is concerned, the buck stops with the Church Council. If there is a question about practice or doctrine, the Council provides the authoritative answer. The Church Council is of course free to take direction from headquarters, which it does, but it remains the competent authority on the affairs of the Church in Austria.

Attendant rights and privileges of state recognition include “the right to practice communal public worship, arrange and administer their ‘internal’ affairs autonomously, and retain possession and enjoyment of their institutions, endowments and funds; and, moreover, the right to found private confessional establishments for instruction and education and provide religious instruction in state schools […] the expense for such education being borne by the state.” (Source)

The church may designate religion teachers for public schools at its discretion. In practice, however, the Church does not take advantage of this privilege, opting instead to run the seminary program much as it is done in the US by calling lay teachers supported by a CES professional. Nevertheless, the Church Council’s autonomy in administering its internal affairs and the right to provide religious education in state schools does play an important role not only in the spiritual realm but also in matters of taxes and entitlements.

With that in mind, let’s turn to the case at hand. In December 2000, a member filed a tax return for the five previous years during which one or more of his four children had been serving a mission, claiming an existing deduction for “exceptional expenses” related to the “vocational/professional training of children abroad” that would have reduced his income tax burden for the five years by a total of EUR 3467.41. Not a huge amount, but when your effective tax rate starts at 38.3% on income above EUR 10,000, you take what you can get. Anyway, the novelty of the claim—initially rejected by the tax authority of first instance—was that a fulltime mission amounted to vocational or professional training.

In order for to qualify as an “exceptional expense,” expenditures must be for training/education not offered within 80km of the place of residence. In order to qualify as “vocational/professional training,” the law requires “intent to meet the objectives of training and education and to pass the required exams through purposeful effort.” In the view of the local tax office, neither criterion was met: missionary service is neither mandatory nor a prerequisite for becoming an ordained priest or teacher of religion. Moreover, missionary activity does not represent special training for a particular profession but a kind of internship for gaining experience and acquiring knowledge through charity and scripture study.

I’m inclined to agree with this assessment based on my own experience, but the decision was appealed, and the second instance turned to the appellant’s bishop for clarification of the following questions:

  1. According to internal church norms, what training must be completed by someone in order to be designated as a teacher of religion at a public school?
  2. If full time missionary service is a prerequisite, how long is this service, where must it be performed and can it can be carried out anywhere, including at home?

The bishop responded by stating that the church does require goal-oriented training of its teachers of religion. The qualifications are determined autonomously by the Church Council and require no further administrative authorization. Criteria include membership in good standing in the Church and a wholesome lifestyle. The Church Council has unanimously determined that no further requirements—particularly pedagogical training—are necessary. The bishop then noted that the Church decides where one serves and that the length of service varies from 18 to 25 months. Furthermore, aspects of the “training” during missionary service that qualify one to teach religion in a public school, include:

  • scripture study
  • study of secondary literature (e.g., Jesus the Christ, Our Search for Happiness, The Articles of Faith, The Great Apostasy, and A Marvelous Work and a Wonder)
  • participation in a weekly two-hour seminar
  • social work
  • Priesthood and Relief Society meetings attendance
  • Sunday school attendance
  • instruction of non-members and members
  • 90 minutes of language study in non-German-speaking missions
  • Four to eight weeks of training at the MTC in Provo, UT
  • honorable missionary service, i.e., abstaining from alcohol, tobacco, coffee, black tea, pornography, and intimate contact with persons of the same or opposite sex, and being honest in your dealings with others
  • honorable release by the Mission President

The second instance felt that its questions had not been fully answered, and so it turned to the Church Council. In its response, the Council “firmly declared” that service as a missionary is a requirement for designation as a teacher of religion. Moreover, the Council distinguished between training to become a missionary, which is completed at the MTC, and training to become a religion teacher, which is the missionary service itself. It reiterated its autonomy in determining the qualifications for teachers of religion, underlined that fulfillment of a fulltime mission qualifies one as a religion teacher and noted that the certificate of honorable release also documented the qualification to teach.

On the basis of these replies, the second instance concluded that

  1. missionaries could not choose the location of their service, and all of the appellant’s children had served abroad. Thus, the requirement that training/education could not be offered within 80km of the place of residence in order to qualify as an “exceptional expense” was met;
  2. case law allowed them to view missionary service as “vocational/professional training” provided said service not consist solely of “practical work” but include goal-oriented training in areas relevant to religious education. Since missionary service also includes participation in seminars, Sunday school, scripture study and attendance at various meetings, this condition for “vocational/professional training” was considered met;
  3. all children possessed the necessary certificate of honorable release qualifying them as teachers of religion;
  4. the appellant’s petition to be granted income tax deductions for “exceptional expenses” related to the “vocational/professional training of children abroad” should be granted.

So chalk one up for state recognition of religion and the latitude it grants the Church to regulate its internal affairs. Of course, in practice, no one is actually designated as a teacher of religion in public schools because there simply are not enough Mormon pupils at any given school to justify having one. So instead (early morning/online) seminary counts as a school subject and grades are disbursed each semester for school credit. It’s simply a pro forma exercise—all youth, even those who do not attend, receive the equivalent of an “A”—that is, incidentally, totally separate from the Church requirements for seminary graduation. I mean, you can’t just claim to have completed a rigorous seminary program with all its goals and objectives and expect that to count for admission to BYU without having actually done anything–please!


  1. really good review of this area — very useful! thanks!

  2. Terry H says:

    Wow. PeterLLC this was awesome! We Americans should take note. While our religious freedoms are currently far different, who knows where some of the SCOTUS decisions might lead us. Best to be aware of the possibilities.

  3. Fascinating. Are you suggesting that the Council’s “firm declaration” regarding qualifications for teachers of religion was disingenuous?

  4. Counting missionary service as vocational or professional training seems like a stretch, but I wouldn’t say it’s disingenuous, especially in light of the questionable value of some training courses offered by the state to the unemployed. However, giving away seminary grades for school credit on the one hand while raising the bar on the other (see here) sends a mixed message that I suspect undermines the seminary program as a whole. To be fair, I don’t know if this is the case across the country, but graduation rates are very low in our ward, and the leadership and teachers have had a hard time encouraging participation.

  5. Gilliam says:

    Peter your Austrian Seminary teachers need to go back and review the grading policies as they are definitely NOT in compliance with the CES guidelines.

    As a teacher I had no choice but to give incompletes for those who did not attend and low grades to those who failed to accomplish the objectives of the course.

  6. Well, the freebie grades are for the state schools; the CES guidelines are applied for seminary graduation. My concern is that for all but a very few youth that might attend BYU some day, the school grades “matter” more than a seminary graduation certificate, and it is precisely the former that are simply being given away per longstanding practice.

  7. The Austrian Church Council might have stumbled on a really good idea here. One of the downsides of using lay clergy is that you have largely untrained individuals handling matters of great delicacy–that this works at all is a testament to the church, but there are still lots of issues with inadequate counseling and uneven (or incorrect) implementation of church policies.

    When one considers that missionaries generally have lots of free time (or, at least, spend a lot of time using proselytizing methods of questionable effectiveness), dedicating a portion of the missionary time to formal vocation training might have significant benefits later on, as the RMs are called to various positions. And much of the training (on church policies and counseling, for example) would be of benefit to missionary work as well.

    Of course, the Church would have to develop a training program and somehow get enough teachers in place to make it happen, which might be impractical–but it would be worth considering.

  8. Really interesting. Do you see any elements of this being translatable to the U.S.?

  9. There may be value (by reducing angst of undue state interference in spiritual things) in more clearly defining the areas in which church and state are autonomous. For example, temple sealings and civil marriages–nowadays these are wholly and uncontroversially separate. Germany could be a more interesting model than Austria in this regard. Most countries in Europe that make such distinctions require that a civil marriage precede a church wedding, but since 2009 in Germany the religious ceremony is no longer subject to civil limitations (because it has been determined not to have any civil relevance) and can be performed before or after a civil marriage, not at all or all by itself (assuming the couple is content with their union not being recognized by the state). I mean, that’s some pretty free exercise of faith right there.

  10. Thanks, Peter! This is awesome and fascinating, and I didn’t know anything about this.

  11. Jared vdH says:

    “Most countries in Europe that make such distinctions require that a civil marriage precede a church wedding, but since 2009 in Germany the religious ceremony is no longer subject to civil limitations (because it has been determined not to have any civil relevance) and can be performed before or after a civil marriage, not at all or all by itself (assuming the couple is content with their union not being recognized by the state). I mean, that’s some pretty free exercise of faith right there.”

    This is what I was hoping the US system could become all the way back when Prop 8 was a thing. However at this point, I don’t know if that compromise is even possible…

  12. @Nepos, it could all be delivered online!

  13. Fascinating post. I didn’t think the member’s tax claim was very strong based on the definitions.

    I wonder how many of our mission and other church policies could be shown to have been driven by tax policy. I heard but cannot confirm that the switch to having missionaries’ parents contribute a uniform amount to the mission fund, and then have missionaries’ costs paid by the church, rather than each parent paying the individual costs of the missionary, was the result of a court decision denying tax deductions for the latter but allowing them for the former.

  14. Thanks for jogging my memory, Joel. Here’s what our own Sam Brunson had to say on that a while back:

    Quick review: prior to November 1990, missionaries and their families paid the actual cost of their missions. Moreover, parents would send money directly to their sons and daughters, with no intermediation from the Church. In May 1990, the U.S. Supreme Court ruled in Davis v. United States that such payments were not tax-deductible, notwithstanding language in the Internal Revenue Code that contributions made “to or for the use of” the Church would be deductible. In November 1990, the Church announced that, going forward, it was equalizing the costs of missions; all (U.S. and Canadian, at least) missionaries would pay a set monthly amount into the Church’s mission fund; the Church would then disperse to missionaries the amount of money they needed. While there’s no indication that the decision in Davis caused the Church to change its policy, I wouldn’t be shocked if the Davis decision at least affected the timing of the change.