WHAT IS IT?
The tax benefit consists in a 55% tax credit on the expenses sustained to be subdivided into ten equal installments, up to the maximum deduction limits.
They are Irpef deductions granted for projects designed to increase the energy efficiency of existing buildings and in the specific case the energy efficiency of windows and doors, in order to improve the thermal efficiency of the building.
The maximum amount on which to calculate the deduction is 60,000 Euros (55% of 109,090.90 Euros)
In any case, as per all tax deductions, this tax credit is allowed within the threshold allowed on the tax return. In essence, any exceeding sum can not be requested for reimbursement.
The essential condition required to benefit from these deduction is that the works must be performed on existing heated residential apartments and buildings (or parts of buildings) (the buildings must be registered in the property registry, be in the process of being registered or be exempted from ICI tax payment). Therefore, any expenses incurred during the construction of a building or on a building under expansion are not eligible.
WHO CAN TAKE ADVATAGE OF THIS PROGRAM?
All the resident and non-resident taxpayers who own the property on which the works are performed are eligible.
SMore specifically:
Individuals who have a binding right on the property;
Condominiums, for works performed on the common areas;
Tenants;
Family members (spouse, relatives within the third degree and close relative within the second degree), cohabiting with the owner or holder of the property - only under a private capacity;
Those who hold gratuitous loan for use rights on the property;
Taxpayers with business income (sole proprietorships, partnerships, corporations)
Professional associations;
Private and public organizations that do not conduct business activities
COMBINING WITH OTHER TAX CREDITS
The 55% tax credit cannot be combined with any other tax credits offered for the same type of programs by other national legislations (E.g. 36% on the IRPEF for the recovery of building property value)
However, the tax benefit is compatible with other non-fiscal benefits (grants and funding) provided for energy efficiency programs.
DEDUCTIBLE EXPENSES
All works that achieve window’s – including doors and windows frames – thermal transmittance reduction by improving the thermal characteristics of existing structures with the supply or replacement of existing doors and windows frames with doors and windows frames that meet the regulations in force, are deductible.
In 2010/2011, the thermal transmittance (glass + frame) factor was equal to 1.8 W/sq.mt K.
Effective January 1st, 2010, the 2008 Financial Act established a stricter limit on thermal transmittance for windows and doors in order to obtain a tax deduction of 55 %. In order to take advantage of the tax credit in case of windows replacement (glass + frame) with new windows, the new windows must comply with the thermal transmittance limits established by the DM dated March 11th, 2008.
This decree makes compulsory a 1.8 W/sq.mt K limit for all the locations within climate area “E” and a limit of 1.6 W/sq.mt K within the climate area “F”.
Therefore, the supplying company will certify the transmittance values with a proper energy certification issued to the customer.
CERTIFICATION REQUIREMENTS
In order to benefit from the tax credits on energy efficiency expenses, it is necessary to acquire the permits demonstrating that the works performed were in compliance with the required technical specifications; otherwise the tax benefit will be lost.
If this document refers to the replacement of windows, it is substituted by the energy certification issued by the manufacturer.
On the other hand, it is not necessary to provide any advance notice; in other words, there is no requirement to send to the Operating Center of Pescara (Revenue Agency) any advance notice concerning the start up of the works, which is instead required in order to claim the 36% deduction.
WHAT DOCUMENTS TO SEND
For works that will be completed within 2011, it is necessary to send to ENEA by electronic filing (finanziaria2010.enea.it), within ninety days from the end of the works, the copy of the certification of energy efficiency qualification (attachment A) and the information sheet related to the replacement of the windows (attachment F).
APPLICABLE V.A.T.
To be highlighted is that the 2008 Financial Act prorogued the reduction of V.A.T. to a 10% rate for the three-year period from 2008-2010 for all services related to ordinary maintenance and extraordinary maintenance performed on residential buildings.
Since the supply of windows and interior doors has significant value, within its tendered contract the contractor shall apply the reduced V.A.T. rate only up to the value of the work considered at net of the value of the goods.
For example:
Total windows + doors + installation € 12,000.00 + V.A.T.
Installation € 2,000.00 + V.A.T. 10%
Goods with significant value subjected to reduced V.A.T. rate € 2.000,00 + V.A.T. at 10%
Good with significant values subjected to full V.A.T. rate: windows + doors € 8,000.00 + V.A.T. 20%
For restoration works, the 10% V.A.T. rate is always used with no expiry date and without distinction of goods with significant value; thus, the entire amount shall be subjected to a single V.A.T. rate (10%).
HOW TO PAY
All payments must be performed via wire transfer, as per law 296/06.
In order to take advantage for this tax program, it is necessary to show to the tax office the documentation related to the works performed, as follows:
Asseveration Certificate prepared by the company supplying the windows
The receipt of the ENEA electronic filing
The invoices and the tax receipts for the expenses performed
A copy of the wire transfers performed
These documents must be kept for at least 3 years.