VAT and other indirect taxes on property sales and rentals
converting Decree Law 223 significantly modify the system of leases and assignments which vary according to their purpose buildings for residential buildings or instrumental nature
The following summarizes the regulatory framework on VAT and registration tax on the real estate and leases real estate after the law of conversion.
Location of residential buildings
hiring, including financial buildings for residential use will be applicable exemption from registration. Therefore, companies that manufactured and lease-type housing and businesses that have built these buildings for resale which, although at the moment, they have come to be leased, from scratch, the exemption from registration. The application of the exemption will result in the non-deductibility of the tax on the purchase, including financial leasing, the cost of maintenance, recovery and management of buildings dedicated to living for companies operating in the field the mere sale of such property and leasing real estate in the area of \u200b\u200btranslational character. It remains, however, without the provision for the non-applicability of the limitation of the deduction on the part of persons engaged in activities that give rise to exempt transactions involving the reduction of the deduction due to the pro rata and the part of undertakings which have as their sole or main object of their activity in the construction of these buildings. It is envisaged that, in the first application, the adjustment of the deduction should not be made with reference to buildings of residential, owned by construction companies / restructured resulting leased as of July 4, 2006, again that the completion of its construction / renovation has taken place by that date. The problem of the adjustment will be limited to the regime in leased buildings whose construction / renovation showing completed after July 4, 2006. The general extension of the exemption to the hiring of manufactured housing-type leads, as a consequence, the application of the proportional registry the rate of 2% and the requirement for registration of fixed-term leases in place by companies who had built for resale and leasing company.
letting of "instrumental by nature "
The scheme of the locations of buildings instrumental nature provides for the exemption from VAT of the leases entered into by any taxpayer, in respect of holders who do not acting in a firm or who, while acting in the exercise enterprise are found to be subject to pro rata deduction for an amount less than or equal to 25%. In all other cases, although the location of the equipment manufactured by nature is taken in by companies who have built or renovated, is expected to blanket application of exemption from registration. The forecast for VAT transactions described above, without this depends on the exercise of any option, it deprives the problem of adjustment. In cases where the exemption is, however, given the opportunity to the landlord to opt for the application of value added, thus solving also on the part of landlords operating in the performance of enterprise, the problem of adjustment of the deduction . The adjustment to the deduction should be made only where the landlord does not avail itself of the possibility of an option for the purposes of the ordinary ways, instead of applying natural exemption from registration. The application of value added, including option for a lease of equipment manufactured by nature, will in any case, the taxation of the fees agreed to register the level of 1%, which is in addition to ordinary taxation for value added tax.
Supplies of buildings by construction companies / ristrutturatici
In general the supply of buildings of all types, made by construction companies / restructuring, are subject to VAT. The liability to VAT regime is applicable to the property if the transfer takes place within 4 years from the date of completion of construction / renovation, however, if the expiration of those terms, the building appears unsold, will apply the general scheme of exemption. In the case of residential property, for which are to expire four years from the completion of the work involved, the construction team / restructuring will proceed with the correction with full repayment of tax deducted in that the good is never put into operation. For manufactured housing type for which the term of four years from completion of construction or renovation to an expired date of July 4, 2006 in the first application you should not make any adjustment, the next sale will be made free without this No adjustment to the deduction. The adjustment to the deduction must, however, be made a scheme for the buildings whose construction / renovation completed showing after July 4, 2006 and its transfer is carried out after the expiry of a period of four years from completion or renovation. In the case of manufactured equipment, application of the exemption will not apply, even though four years have elapsed from the date of completion of construction or renovation, and then in the event that the sale is made in respect of transferees who are not acting exercise of business or who, while acting in the performance of a company, subject to the deductible proportion resulting in an amount equal to or less than 25%. Similarly, the exemption will not apply, and consequently, may be subjected to VAT the supply of manufactured equipment, although that occurred 4 years after completion, if the option to apply the ordinary VAT regime is manifested in its act of transaction.
Sales of manufactured by companies other than manufacturers / ristrutturatici
The VAT system of taxation would be different depending on whether the assignment has as its object manufactured for residential buildings or equipment. It is expected that the supply of buildings for residential, regardless of the quality of the purchaser (company or private), do by entities other than the manufacturers / restructuring, should always be made pursuant to an exemption of VAT with the consequent application of the registration in proportion. From July 4, is no longer allowed to deduct input tax on purchase of buildings or portions of buildings to residential, and the first application, the adjustment of the deduction of input VAT shall not be made with respect to residential property owned as of July 4. For the supply of equipment manufactured by nature is a discipline provided free with the exception of those carried out against persons who are not acting in the exercise business, or carried out against persons who, while acting in the performance of enterprise are found to be subject to the deductible proportion to an amount equal to or less than 25%. With regard to the supply of equipment manufactured by nature given to persons other than those described above is allowed to the transferor the right option for the application of the VAT system in place of the exemption that option will not take the deduction and allow adjustment owners subject the exercise of the deduction of input tax for the purchase of such property.
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