The Associated Press October 12, 2010, 5:17PM ET

Summary Box: EU probes church tax breaks in Italy

INVESTIGATION: The European Commission has placed Italy under investigation for granting tax breaks to either the Italian Catholic Church or the Vatican for church-run clinics and hostels. The Italian government has a month to respond before the commission makes a final decision.

2005 EXEMPTION: Regulators are looking into a property tax exemption Italian Premier Silvio Berlusconi extended for the church to cover buildings where it runs businesses such as private health clinics or convents that host pilgrims.

EU RULES: The EU said it is investigating because it believes the tax exemptions could violate EU rules on state subsidies and distort competition.

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