The Superbonus is a recent tax break introduced by the recent Decreto Rilancio increasing the tax credit percentage to 110% for qualifying expenditure paid between July 1st 2020 to December 31st 2021. The following expenditure qualifies:
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Who can qualify?
The following taxpayers can benefit of the Superbonus:
NON RESIDENTS can also qualify for such tax break.
Any qualifying expenditure will attract the tax credit as long as it has been paid from July 1st 2020 to December 31st 2021.
There are various qualifying expenditure and the total cap varies based on the type of works performed. Here the comprehensive list:
Insulated coating expenditure (external coating, floor insulation) cap is € 50.000 per house unit, reduced to € 40.000 per unit if the unit is located in a condominium.
CONDOMINIUM HEATING SYSTEM
If you live in a condominium, the centralized heating system attracts a tax credit capped at € 20.000 per house unit as long as the condominium has 8 units or less; € 15.000 if the condominium has more than 8 units.
INDEPENDENT HOUSE HEATING SYSTEM
It is possible to benefit of the 110% Superbonus tax credit capped at € 30.000.
SEISMIC STRUCTURAL IMPROVEMENTS
The Seismic structural improvements has been existing for few years; now this bonus has been included in the Superbonus attracting a 110% tax credit.
The cap for such expenses is € 96.000 per house unit.
In order to benefit of such tax credits you must own a property in a qualifying municipality, as well as improve its seismic responsiveness of at least one category.
Linked qualifying expenses
The following expenses do not automatically attract the 110% tax credit, however if they are linked to one of the previous expenses, it is possible to extend the Superbonus to such expenses.
How does that work?
Just like every other tax break, the qualifying expenditure is multiplied by the coefficient set by the law (i.e. 110%). The tax credit will offset the IRPEF payable for 5 consecutive tax years.
Should you insulate your detached home, spending € 60.000, you can benefit of a € 55.000 tax credit (€ 50.000 x 110%) to be deducted in 5 years, hence € 11.000 per year.
While filing your taxes, you must include your expenses in your tax return, thus resulting in a tax credit to be refunded. Anyway, what happens if your gross tax is less than € 11.000?
Unfortunately, the unused tax credit is wasted.
Professionals sworn statement
In order to benefit of the tax credit, you are required to obtain a SWORN STATEMENT:
Failure to acquire ANY of the two above sworn statements, automatically disqualifies you to benefito of the tax credit as well as trading it.
The sworn statement related expenses are also deductible at 110%!
How can I trade the tax credit?
The decree allow the taxpayer to trade the tax credito to:
Should you trade your tax credit to your contractors, the contractor must discount the tax credit value in the invoice raised, reducing the amount payable.
Going back to our previous example, the taxpayer would only pay € 5.000 to settle the contractors bill. If the qualifying expenditure falls within the maximum cap, the contractors invoice will be reduced to € 0.
Alternatively, you can trade the credit to a Bank or any other financial financial institution which will pay directly the taxpayer. This approach requires the taxpayer to advance the whole expenses, whilst the first approach does not require to advance any payment.
Beware that the tax credit can be sold either partially or in full.
What is the best thing to do?
As usual there is not a one fits all solution; the best course of action depends on your personal tax situation.
First of all, you have to make sure that you pay enough gross income tax to deduct the tax credit via your tax return.
You then need to evaluate the best offer from your contractors as well as the financial institutions.
Non residents normally prefer to opt for the tax credit trade.
How can Accounting Bolla help you
Our tax advisors and Engineers team will help support you in each stage:
After moving back to Italy from the United States in 2013, I realized how much an accounting and tax firm was needed to help expats living in Italy to comply with the local tax regulations.