8575 VAT on professional fees

Did I read here that the vat rate on professional fees had recently gone down from 20%? Have tried searching for the post but haven't found it. Can anyone help please? and it would be great to know the new rate and when it changed.

Category

Property Sales/Rental Advice

You mean geometras, structural engineers et cetera....

paid a Bill to our geometra and wouldn't you know it 20% VAT (iva in Italian terms)

No change 20% applies.

However this rather depends on what you are doing a new registered build using a building company to do the works should be applying 4% and refurb 10% Iva. And I'll think you'll find this applies to the geometra also.

You will need to be resident and your primary residence. Foreigners... eh I don't think so.....!!

I was thinking of my architect in fact and my project is a new-build but I am non-registered.
As for the rate on building costs I have always thought the irate was 10% not 4%.

[quote=Robert;80800]I was thinking of my architect in fact and my project is a new-build but I am non-registered.
As for the rate on building costs I have always thought the irate was 10% not 4%.[/quote]

Dear Robert,

If he wants to charge you 10% - thank him very much!

As said if you use a registered company to build your house and you are resident of Italy and it is your "prima casa" not a second house/holiday home et cetera then 4% iva applies.

If the invoice for professioal servies goes through the building company the building company will charge 4% iva (note - the building may take out a margin but it shouldn't be 16% the difference in Iva). If the architect charges you privately for his services then it is 20% that applies.

You may consider a project manager who can explain better try CasaVerdeItalia.com

Just one further point.....
When they say new build

1. they are talking virgin land never been a structure there before or
2. new house on an existing property and change of use ...

but it does get complicated aroundabout here....???

[quote=lotan4850;80801]Dear Robert,

If he wants to charge you 10% - thank him very much!

As said if you use a registered company to build your house and you are resident of Italy and it is your "prima casa" not a second house/holiday home et cetera then 4% iva applies.

You may consider a project manager who can explain better try CasaVerdeItalia.com[/quote]

I fully support lotan4850. IVA for your first dwelling-house is 4% all the others are subjected to 20%. There has been no change on IVA. The only modification is about refunded VAT for cars purchased by Companies and freelances, but it hasn’t been turned into a law yet.

The house is a new build-ie it is on land which was not built on before but the builder is a typical small local builder who has his own company to which I transfer funds from time to time. Whether this is a "registered company" I do not know. Also I am non-registered.
My architect bills me direct not through the builder.
I suspect therefore that I am paying the correct rates (20% to architect and 10% to builder). Do you agree?
and is it definitely not the case that iva on professional fees has been reduced?

[quote=Robert;80876]
I suspect therefore that I am paying the correct rates (20% to architect and 10% to builder). Do you agree?
and is it definitely not the case that iva on professional fees has been reduced?[/quote]

That's my understanding too.

The link below to the tax guide guide has some reference to the conditions. There is probabaly more specific IVA stuff on the Agenzie Entrate site. I believe the reduction was (it may have changed in the last year or two) geared toward labour costs and I seem to remember seeing an example calculation of how to reduce IVA, distinguishing between labour and non-labour costs where the ratio is heavily in favour of the latter.

[URL="http://www.agenziaentrate.it/ilwwcm/resources/file/eb82260abb44efd/ristrutturazione_edilizia_fin_2007.pdf"]http://http://www.agenziaentrate.it/ilwwcm/resources/file/eb82260abb44efd/ristrutturazione_edilizia_fin_2007.pdf[/URL]

[quote=Robert;80876]The house is a new build-ie it is on land which was not built on before but the builder is a typical small local builder who has his own company to which I transfer funds from time to time. Whether this is a "registered company" I do not know. Also I am non-registered.
My architect bills me direct not through the builder.
I suspect therefore that I am paying the correct rates (20% to architect and 10% to builder). Do you agree?
and is it definitely not the case that iva on professional fees has been reduced?[/quote]

I'm afraid I don't agree it should be 20% to both the builder and the architect ; iva has not been reduced if you are not resident.

I said 10% to the builder

[quote=Robert;80901]I said 10% to the builder[/quote]

If we are talking VAT (IVa) it's 20% iva not 10% as far as I know. You'll have to correct me. Any reduced iva is only applicable to residents.

We are talking iva and we have definitely paid "only" 10% to builders and other contractors and we are non-residents. However the rate has been 20% for professionals which is where I started this thread.

[quote=Robert;80908]We are talking iva and we have definitely paid "only" 10% to builders and other contractors and we are non-residents. However the rate has been 20% for professionals which is where I started this thread.[/quote]

I'd count my lucky stars. I have spoken to two geometras and an architect and you should be paying 20%. Don't rock the boat if they want to charge you 10% so be it. Watch out for the VAT bill later if you are unlucky??

Good Luck!

[quote=lotan4850;80909]I'd count my lucky stars. I have spoken to two geometras and an architect and you should be paying 20%. Don't rock the boat if they want to charge you 10% so be it. Watch out for the VAT bill later if you are unlucky??

Good Luck![/quote]

So.... I have found the following:

[I]Iva al 10% per lavori di restauro, risanamento conservativo e ristrutturazione

Rientrano in questa categoria tutte le opere di restauro, risanamento conservativo e ristrutturazione così definiti dall'articolo 31, lettera c) e d) della legge 457/1978:

c) interventi di restauro e di risanamento conservativo, quelli rivolti a conservare l'organismo edilizio e ad assicurarne la funzionalità mediante un insieme sistematico di opere che, nel rispetto degli elementi tipologici, formali e strutturali dell'organismo stesso, ne consentano destinazioni d'uso con essi compatibili. Tali interventi comprendono il consolidamento, il ripristino e il rinnovo degli elementi costitutivi dell'edificio, l'inserimento degli elementi accessori e degli impianti richiesti dalle esigenze dell'uso, l'eliminazione degli elementi estranei all'organismo edilizio;
d) interventi di ristrutturazione edilizia, quelli rivolti a trasformare gli organismi edilizi mediante un insieme sistematico di opere che possono portare ad un organismo edilizio in tutto o in parte diverso dal precedente. Tali interventi comprendono il

ripristino o la sostituzione di alcuni elementi costitutivi dell'edificio, la eliminazione, la modifica e l'inserimento di nuovi elementi ed impianti;

Sui corrispettivi degli interventi di restauro e risanamento conservativo e sulle ristrutturazioni edilizie, la tabella A, parte 3^, del DPR 633/72, prevede l'Iva al 10% sui beni finiti, escluse quindi le materie prime e semilavorate e sulle prestazioni di servizi dipendenti da contratti di appalto.
[/I]

There are cases in which renovation and/or consolidation have 10% IVA (VAT), confirming to the law nr. 457/1978.

[quote=sergiobuonanno;80982]So.... I have found the following:

[I]Iva al 10% per lavori di restauro, risanamento conservativo e ristrutturazione

Rientrano in questa categoria tutte le opere di restauro, risanamento conservativo e ristrutturazione così definiti dall'articolo 31, lettera c) e d) della legge 457/1978:

ripristino o la sostituzione di alcuni elementi costitutivi dell'edificio, la eliminazione, la modifica e l'inserimento di nuovi elementi ed impianti;

These are cases in which renovation and/or consolidation have 10% IVA (VAT), confirming to the law nr. 457/1978.[/quote]

Thanks Sergio!

I am aware of this law but it didn't think it applied to a new build by a non resident. I thought not ...??

Thus my answer to Robert.

So I believe my answer still applies and his builder is debiting the wrong VAT. Robert must watch out for any final VAT invoice he maybe presented with when the builder's accountant (commercialista) finds out...??

Let's hope not... good luck Robert!

It would be interesting to understand if non-EU citizens can take advantage of that law. I'm not sure about that, but it should make no difference, I mean, the law does not specify anything about the residence of the owner; but I am sure it applies to EU-citizens.

Sergio,
I am I right in assuming that this law applies to EU citizens resident in Italy only doing refurbishment? For non resident (in Italy) EU citizens this law doesn't apply?

[quote=lotan4850;81016]Sergio,
I am I right in assuming that this law applies to EU citizens resident in Italy only doing refurbishment? For non resident (in Italy) EU citizens this law doesn't apply?[/quote]

Ok. I'll try to remove all doubts. Give me some time to contact some friends and have a clarification on this subject. It'll take 1-2 days...

Thanks Sergio Buonanno and Iotan4850 for your comments. Thinking about it i think my architect managed to get my job classified as a restoration as we did have a ruin originally which we were going to restore but it fell down in the landslips in 2005 and we had to build an entirely new house on a different piece of land.

I'm sorry....it took more time because the subject is quite complex. It looks like residents only could benefit from reduced IVA. Anyway, I'm still investigating...

:masked:

[quote=sergiobuonanno;81510]I'm sorry....it took more time because the subject is quite complex. It looks like residents only could benefit from reduced IVA. Anyway, I'm still investigating...

:masked:[/quote]

Would be great to get clarity on the residence question. I have not been able to find a residence stipulation in the bits of law I have seen, but the rules are fragmented and my Italian is not good enough to deal with legal detail!:veryconfused:

New builds should apply 4% IVA if Prima Casa on materials and labour.
The Architect will always be 4% INPS and 20% IVA regardless of house/Project.
The 10% IVA applies to a proper renovation when all the applications have been approved to the Comune regardless of whether you are resident or not.
Lulu - TurnKey Italia
[url=http://www.turnkeyitalia.com]index[/url]

On New Build 4% IVA applies if the house is a Prima Casa
On Renovations, if the Comune has approved the project, then 10% IVA applies to Labour and Materials whether you are resident or not
The professional (Architect) will always apply 4%INPS and 20% IVA regardless of the project
Lulu - Turnkey Italia
[url=http://www.turnkeyitalia.com]index[/url]

You can get a reduced VAT bill; if you agree with the builder that the architect debits through him and not directly to you (as the client).

At “rogito” taxes are worked out on the basis of residency if you’re not resident then you pay the tax as a second home (not “prima casa”).
By definition "prima casa" means you are a resident of Italy; if you are resident abroad your main residence is abroad. Therefore your house in Italy is a second house. No 4% iva here then.

As regards luluprimavera’s reply; I have no direct experience as regards restoration using this criteria for restoration and she may be right. A bit of a grey area…I think?? But Robert’s experience bears lulu’s premise out…!!

Well done lulu!
:smile:

[quote=lotan4850;82396]At “rogito” taxes are worked out on the basis of residency if you’re not resident then you pay the tax as a second home (not “prima casa”).
By definition "prima casa" means you are a resident of Italy; if you are resident abroad your main residence is abroad. Therefore your house in Italy is a second house. No 4% iva here then.
[/quote]

couple of small pedantic points for completeness:

1) you [B][I]can[/I][/B] claim prima casa benefits at rogito if you are non-resident foreigner, [B][I]as long as[/I][/B] you intend to become resident within 18 months (obviously you then have to actually become resident within 18 months of the date of the date of purchase or the discounts have to be repaid)

2) properties deemed to be "luxury" don't qualify for prima casa benefits irrespective of elegibility of the purchaser

Thanks Pigro; you are correct ; however saying this and doing it are two different things and people only manage to stave off the inevitable 18 months further down the line.

Lulu

Re your post ...........

"On New Build 4% IVA applies if the house is a Prima Casa
On Renovations, if the Comune has approved the project, then 10% IVA applies to Labour and Materials whether you are resident or not"

...... judging by your link you must deal with this regularly for clients. Are you talking about tax residence as opposed to any other definition of residency. Do you know where can I find any offical guidance etc on this IVA point? I believe there is a declaration to be completed - does anyone have a copy which may help to deduce the answer?