Tax deductions and VAT reductions

Ibath products are eligible both to tax deductions and to VAT reductions

This is a complex, multifaceted and ever-changing matter. We advise you to pay attention to the applicable laws and the relevant amendments.

As to “deductions” the Italian Revenue Agency informs that:

the Budget Law 2018 (Law 232 of 11 December 2016) has extended until 31 December 2018 the 50% detraction for building renovations until 31 December 2018. The same extension applies to the Furniture Bonus, that is, the 50% detraction on costs of furniture bought up to 10 thousand Euro between 6 June 2013 and 31 December 2017.

A 50% detraction also applies to other costs incurred, between 6 June 2013 and 31 December 2017, to buy furniture and large domestic appliances with rating A+ or more, or A rating for ovens and appliances that require an energy label, bought for the property that is being renovated.

CONDITIONS TO APPLY FOR THE DEDUCTION

The main conditions to be eligible for the reduction are:

  • the upper limit of the expense, on which the deduction is to be calculated is 96,000 euro for expenses incurred between 26 June 2012 and 31 December 2017
  • the deduction is to be divided into 10 equal annual installments.

The deduction applies even in case of restoration, preservation and renovation of entire buildings carried out by building and restoration companies and building cooperatives, or of ordinary and extraordinary maintenance. See Article 3, Presidential Decree [Dpr] 380/2001 (Consolidated building laws and regulations).

The persons entitled to the reduction are:

  • the owner or bare owner or a cohabiting relative of the same or property holders (if they sustain the expenses and the invoices and bank transfers are in their name)
  • the holder of a right to use the property (usufruct, use, residential or building lease)
  • a tenant or borrower
  • the partners of divided and undivided cooperatives
  • members of partnerships
  • individual entrepreneurs, only for properties that are not instrumental or sold as goods
  • persons performing works on their own, only for the purchase costs of the materials used

In order to benefit from the reduction, you have to:

  • send the competent local health authority a notice by registered letter with acknowledgement of receipt (A.R.)  before starting the works;
  • pay the costs eligible for reduction by bank or postal transfer indicating the reason for payment and  the tax code of the beneficiary of the deduction and the tax code and VAT number of the payee (since 1 January 2015, the withholding of banks and Poste Italiane Spa has been equal to 8%)

For the complete text of the Agenzia delle Entrate, click here.

VAT REDUCTION

Services related to building renovation, ordinary and extraordinary maintenance of buildings mainly used as private residence are subject to the reduced VAT rate of 10%.

On pages 24-25 of the booklet, “The Agency informs” that:

Purchases of sanitary appliances and taps are included in the reduced 10% VAT if they concern works under Article 3, Dpr 308/2001, that is:

  • ordinary and extraordinary maintenance of residential properties (materials and goods must be bought and supplied by the person or entity that performs the works)
  • building restoration, preservation and renovation (the reduction applies whether the goods are purchased by the client or by the firm or person who performed the works)

BUY WITH TAX REDUCTIONS

To apply the tax reductions when you buy,  you should send the following documents to the fax number:  +39 0434 610 781

or by A/R registered letter to: Trem Srl, Via delle Crede 10/F, 33170, Pordenone (PN), Italia

  • copy of a building  license (maximum validity 3 years)
  • copy of a valid identity document
  • copy of your tax code
  • self-certification

After sending the above documents, you can order on line and buy the products chosen (which will still indicate the prices with a 22% VAT rate), and enter in the notes the words “Tax Reduction Documents Sent”. You will then receive a new email with the correct calculation, the requested tax reduction and the bank details for the payment.

For more information, download here the guide to building restoration and tax reductions. Number of Agenzia delle Entrate Assistance 848.800.444