Italy and the Holy See have signed an accord to cooperate on fiscal matters, as the Vatican works to improve transparency after a string of financial scandals.
Italy's finance ministry and the Vatican announced the agreement on Wednesday.
The ministry said "full cooperation" between Italy and the Holy See was now possible thanks to reforms begun by the Vatican in 2010. It noted that Italy was the first state with which the Vatican signed such a cooperation accord.
Vatican-owned property outside the tiny Vatican City State's borders and situated in Italy will continue to be exempt from Italian property tax.
Pope Francis is overhauling Vatican power structures to combat corruption and other financial ills. The Vatican bank had long been characterized by opaque, secretive ways.