Prepared by Franco Boga, Marco Napolitano, Guido Guidi and Andrea Bordin
Article 119 of the Law Decree no. 34 of 19 May 2020 (the so-called “Relaunch Decree”) in the final version published in the Official Gazette, provides for the strengthening of the existing tax measures for interventions aimed at energy saving and anti-seismic adjustment.
In particular, the above new provision increases to 110% the tax deduction recognized for certain interventions of energy requalification, reduction of seismic risk, installation of photovoltaic systems and columns for charging electric vehicles, with regard to the expenses incurred from 1 July 2020 to 31 December 2021, also providing that the incentive must be divided into 5 annual instalments of equal amount.
The different types of interventions eligible at 110%
Regarding the energy requalification works, the tax deduction of 110% is recognized for the following types of structural interventions, i.e. the so called “leading interventions”:
- thermal insulation interventions regarding the building shell with an incidence greater than 25% of the gross dispersing surface of the same building (i.e. the thermal coat). The deduction is calculated on a total amount of expenses not exceeding Euro 60.000 multiplied by the number of real estate units of the building;
- interventions on the common parts of buildings and single-family buildings for the replacement of existing winter air conditioning systems and the installation of condensing boilers or heat pumps; in this case, the tax deduction is calculated on a total amount of expenses not exceeding Euro 30.000 multiplied by the number of real estate units of the building or in the total limit of Euro 30.000, in the case of works carried out on a single-family building.
The 110% tax deduction also applies to all other and different energy efficiency interventions pursuant to article 14 of Law Decree no. 63 of 2013, within the limits of the expenses provided by the law for each operation, and as long as they are carried out in conjunction with at least one of the “leading interventions” listed above. For example, the costs incurred for windows can benefit from the 110% rate if they are combined with the “leading interventions” and provided that the same costs meet the other subjective requirements described in the following paragraph. Otherwise, they remain eligible at the ordinary rates pursuant to the prior law regime.
Even the installation of photovoltaic systems and charging columns benefits from the increase of 110% only if the installation is carried out contextually to the “leading interventions”, if the energy in excess is transferred to the GSE and if the same interventions are not combined with other public incentives or other facilities.
In order to benefit from the maximum 110% deduction, however, the interventions must lead to an improvement of at least two energy classes of the building, or, where it is not possible, to the achievement of the highest energy class, to be demonstrated by the energy performance certificate (A.P.E.), before and after of the intervention, issued by a qualified technician in the form of the certified declaration.
Art. 119, par. 4, extends the deduction of 110% to the interventions related to the adoption of anti-seismic measures, the execution of works for static safety, in particular on the structural parts, and to the preparation of mandatory documentation to demonstrate the static safety of the building.
The beneficiaries of the new tax provision
Pursuant to art. 119, par. 9, the deduction of 110% applies exclusively to the interventions carried out by:
- by the condominiums;
- by the individuals, outside from the business activities, on real estate units, with the exclusion of works carried out on single-family homes different from which used as main house;
- by Autonomous Social Housing Institutes (IACP) and independent housing cooperatives.
Therefore, the new tax incentive is granted if the works are carried out on the “second houses”, but only if these latter are not “single-family buildings” (i.e. individual units or villas, as defined by paragraph 3 of the article 17 of the Presidential Decree 380/2001), given the fact that these are only eligible if they are used as main residence. On this point, however, it cannot be excluded amendments to the Decree-Law according to which the new tax deduction may be eligible also for all second houses (including the single-family ones).
Extension of the rules on the transformation of the deduction and instant discount on the consideration
The other main new element of the provision compared to the past is contained in the article no. 121 of the “Relaunch Decree” and concerns, for some specific interventions carried out in the years 2020 and 2021, the possibility for the taxpayer who bares the costs to decide, instead of the direct deduction in the income tax return (5/10 years, depending on the specific intervention realized), alternatively:
- for a contribution, in the form of a discount on the consideration due up (s.c. “instant discount”) to a maximum amount equal to the same consideration due, anticipated by the supplier who carried out the interventions and by himself retrieved in the form of a tax credit, with the possibility of subsequent disposal of the tax credit to other parties, including credit institutions and others financial intermediaries, or;
- for the conversion of the facilitated amount into a tax credit, with the possibility of subsequent transfer to other parties, including credit institutions and other financial intermediaries.
The tax credits for which it will be possible to exercise the option are those generated by: redevelopment of the building stock pursuant to art. 16-bis, par. 1, lett. a) and b) of Tuir (Irpef deduction of 50%, which from 2021 should return to 36%); energy requalification works pursuant to art. 14, Law Decree 63/2013, with deductions ranging from 50% to 110%; all anti-seismic interventions so called «special» pursuant to art. 16, Law Decree 63/2013, with deductions ranging from 50% to 110%; “façade bonus” under art. 1, par. 219, Law 160/2019, with deduction of 90%; photovoltaic systems, pursuant to art. 16-bis, par. 1, lett. h) of Tuir and storage systems, with deduction of 50-110%; charging stations for electric vehicles pursuant to art. 16-ter, Law Decree 63/2013, with 50-110% deduction.
Once the deduction is transformed into a tax credit or has been discounted by the supplier, the beneficiary, in addition to transfer the credit, can use it in horizontal compensation with F24, on the basis of the «residual deduction rates not used», with the same annual allocation in which the original deduction would have been used. The limits set by art. 34, Law 388/2000 (annual compensation limit) and by art. 1, par. 53, Law 244/2007 (limit set for credit facilities indicated in the income tax return) do not apply.
Therefore, pursuant to final version of the article 121, par. 3, Law Decree 34/2020, the beneficiary cannot take advantage of the potential «part of the tax credit not used in the year» in the following periods. Moreover, the beneficiary cannot claim the refund of the amount not used in compensation. In these cases the bonus is lost. This limit also applies to the transferee of the credit or to the supplier who made the “instant discount”.
Specific guidelines of the Director of the Revenue Agency, to be adopted within 30 days from the date of entry into force of the “Relaunch Decree”, shall define the implementation procedures and the electronic exercise of the options.
Transformation of the deduction / discount on the consideration: the specific conditions for the superbonus 110%
Among the interventions enabling taxpayers to benefit the superbonus to 110%, pursuant to article 119 of the “Relaunch Decree”, the possibility of exercising the option for the transformation of the deduction or for the discount on the invoice provided for in art. 121 of the “Relaunch Decree” is subject to:
- the request for the “conformity permit ” of the data relating to the documentation attesting the existence of the conditions giving entitlement to the deduction. The “conformity permit ” is issued pursuant to art. 35 of Legislative Decree no. 241/1997 by the subjects indicated in lett. a) and b), of the third paragraph of art. 3 of Presidential Decree 322/1998 (subjects entered in the registers of chartered accountants, accountants and of commercial experts and employment advisers, etc.) and by responsible for the tax assistance of CAF;
- the achievement of the certificate, from qualified technicians, on the compliance with the requirements provides by the relevant ministerial Decrees and on the corresponding congruity of the expenses incurred in relation to the facilitated interventions.
The data relating to the option must be transmitted exclusively electronically in the manner arranged by the provision of the Director of the Revenue Agency and by the Decree of the Minister of Economic Development, soon to be issued.
Finally, it should be noted that the costs incurred for the issuance of certificates/statements and for the “conformity permit ” can be cumulated with the expenses deductible at 110%.
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PwC TLS Avvocati e Commercialisti
PwC TLS Avvocati e Commercialisti