In 1870 a new church law came into force that separated the church from the state. In spite of this, the church and its parishes retained their status under public law and the rights to levy taxation and to partial tax exemption. Only church members pay church tax.
Under the current tax system, parish councils set tax rates in the same way as municipalities. The tax administration distributes revenue on a monthly basis to the parishes, who pay a contribution defined by law to the cost of tax collection.
Parishes receive a state compensation for taking care of important task in socety. The amount of the compensation is 114 million euros.
The state compensation is used mainly to defray interment costs, but it also helps fund the keeping of records and church maintenance. The current system dates back to 2016. Before then parishes received a share of corporation tax revenue.