A report by Reuters said the verdict, which was based on German corporate law, upheld the system by which the state collects religious taxes from registered Catholics, Protestants and Jews with their monthly returns and distributes them to the religious communities.

"Whoever wants to officially leave a religious community that is registered as a statutory corporation cannot limit this withdrawal to the statutory corporation and remain a member of the faith community," said the country's top appeals court in such issues.

The Church hailed the verdict as confirmation of its tax rule, which the bishops reconfirmed last week with a decree saying members who opted out of the tax could not receive sacraments, work in the Church or have a religious burial.

"The Church is a community of faith that exists in Germany in the form of a statutory corporation - they cannot be separated," Archbishop Robert Zollitsch, head of the bishops' conference, said after the verdict was announced.

The legal challenge to the tax began in 2007 when a retired professor of canon law told his local tax authority that he wanted to quit the institutional Catholic Church and stop paying its tax, but continue to practice the religion.

If the Leipzig court had ruled against the Church, it could have prompted a wave of departures from the religions that charge the tax, which amounts to 8 or 9 percent of earnings, the report said.

The German church levy was introduced in 1803 in compensation for the nationalisation of religious property.

In 2011, the Catholic Church received 5bn euros (£4bn; $6.4bn) and the Protestant Church 4.5bn euros from taxpayers, each adding up to the bulk of the churches' income, the BBC reported.

Sources

• BBC
• Reuters/Chicago Tribune
• Image: Reuters

The German bishops' conference last week issued a decree, saying it was "worried" about the Catholic Church's dwindling numbers and wanted to stem the drop.

Those who will refuse to pay the tax will not ba able to go to confession, join the celebration of the Eucharist, receive the sacrament of confirmation or the anointing of the sick - unless the patient's life is in danger.

The new decree takes effect on Monday.

Germany has had a system in place since the 19th century asking residents to either officially declare their religion and pay a church tax, or to be classed as "non-religious."

A change in status from being a member of a religion requires a formal procedure to "leave the Church," as an increasing number of Germans have done, mostly from the Catholic Church but also from the Protestant faith, the Agence France Presse reported.

The tax amounts to between eight and 10 percent of income tax, depending on where the person lives.

Although the new decree permits a religious marriage for anyone who has left the Church, it stipulates two conditions - an approval from the local religious authorities and a promise to keep the faith and uphold the religious education of any children in the Catholic faith.

However, the bishops' decree said "if the person who has left the Church has not displayed any regret before their death, a religious burial may be refused."

A progressive Catholic movement reacted angrily to the move.

"It's a bad decree coming at a bad time," the "We Are Church" ("Wir Sind Kirche") group said in a statement. "Instead of tackling the reasons for Church-leaving in large numbers, this bishops' decree is a threat to the people of the Church and is not going to motivate people to remain loyal or to join the community of those who pay their church tax," it said.

Sources

• AFP/Inquirer
• BBC News
• RTE News
• Image: dw.de