Itallian real estate tax

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ITALIAN REAL ESTATE TAXATION 1. Acquisition of the real estate investment Acquisition of a real estate property under VAT regime: Companies (as seller), in case of acquisition of immovable property such as buildings lands and buildings, can opt to have the transactions either exempt from VAT or subject to VAT. Construction companies or companies which restore/renovate buildings are obliged to apply for VAT, plus transfer tax of 4% cadastral and mortgage tax. The VAT standard rate is 21% The transfer tax is set at 4% as cadastral and mortgage taxes (3% for individuals who acquire residential units which are not subject to the VAT mandatory regime). Acquisition of the real estate property outside the scope of VAT: The transfer tax amounts to 7% in principle but 15% for sale of non-­‐building lands and 3% for acquisition of non-­‐luxury residential units from private individuals and for use as main dwelling houses. Notary fees are negotiable. Land registrar fee amounts to 1% of the cadastral tax and reduced to € 168 if VAT is applicable. The acquisition of shares of a real estate company is not subject to transfer duties. 2. Holding the real estate investment Net rental income, reduced by deductible expenses, is subject to corporate income tax at a standard rate of 27.5% + 3.9% (local tax). Depreciation is deductible only for business buildings at the rate of 3%. The tax losses shall be carried forward indefinitely but can be used to offset up to the limit of 80% of the taxable income for each fiscal year. The interest expenses exceeding the interest income will be deductible up to 30% of the company’s EBITDA (gross profit). The interest expenses exceeding the 30% of the gross profit should be carried forward for 5 fiscal years. Autorisation d’établissement du Ministère des Finances luxembourgeois n° 26/12 en tant que Professionnel du
Secteur Financier agréé par la Commission de Surveillance du Secteur Financier luxembourgeoise.
N° R.C.S. Luxembourg B 94364
TVA LU 19788437
ING Luxembourg S.A.
IBAN LU72 0141 3413 6050 0000
BIC CODE : CELLLULL
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18 rue Robert Stümper • L-­‐2557 Luxembourg T +352 26 38 92 40 • F +352 26 38 92 41
www.finimmo.com
Another local tax is levied on the cadastral value of the real estate and may range from 0.1% to 1.06%. The lease of business buildings is subject to VAT at the rate of 21% (option for the VAT regime exemption), plus 1% registry tax. The lease of residential units by by construction companies is subject to VAT at the rate of 10%, plus 2% registry tax. Buildings which are different from the 2 cases above is VAT exempt, but is subject to 2% registry tax. 3. Selling the real estate investment Capital gain of the real estate property or the real estate oriented company is taxable at the standard corporate income tax rate: 27.5%. In case of sale of a business building, an additional local tax at the rate of 3.9% shall apply. The present document only has an informative purpose, and constitutes neither a tax advice, nor any part of a contract or an offer. Autorisation d’établissement du Ministère des Finances luxembourgeois n° 26/12 en tant que Professionnel du
Secteur Financier agréé par la Commission de Surveillance du Secteur Financier luxembourgeoise.
N° R.C.S. Luxembourg B 94364
TVA LU 19788437
ING Luxembourg S.A.
IBAN LU72 0141 3413 6050 0000
BIC CODE : CELLLULL
2/2