The issue of access to the flat tax regime during contractual extension is inspired by a question raised by a taxpayer and the related response from the Revenue Agency.
The taxpayer's doubt arises due to the extension of the dry tax option to instrumental rental contracts stipulated in 2019, which concern properties for commercial use belonging to category C/1 with a surface area of up to 600 square meters, excluding appurtenances. Dry coupon which, in these cases, has a rate of 21%.
The flat tax in effect replaces the personal income tax and the related surcharges (for the part that derives from the income of the property) and the registration and stamp duties on the rental contract, including those on termination and extensions of the agreement.
A taxpayer turns to the Revenue Agency stating that he has signed a contract on 20 February 2019 with a duration from 1 February 2019 to 31 January 2025.
The contract was stipulated while the art. was in force. 1 co. 59 of the 2019 budget law, the taxpayer asks if it is possible, when extending the agreement, to opt for the flat tax rate.
For the taxpayer the option is possible because from paragraph 59 of the art. 1 of the 2019 budget law shows that: “The rent relating to contracts stipulated in 2019, concerning real estate units classified in cadastral category C/1, Of surface up to 600 meters squares, excluding appurtenances, and related appurtenances rented jointly, can, as an alternative to the ordinary regime in force for the taxation of land income for the purposes of personal income tax, be subject to the flat rate tax regime, referred to in Article 3 of Legislative Decree 14 March 2011, n. 23, with the rate of 21 percent.”
The law therefore provides for the possibility of opting for the flat tax regime also in relation to rental payments which refer to contracts stipulated in 2019 and which concern properties for commercial use in category C1, i.e. shops and workshops, excluding appurtenances.
Dry coupon option during contract extension
The Revenue Agency with resolution no. 190/2020 essentially declares to share the conclusions of the applicant by recalling point 2.1 of circular no. 26/E of 2011, which provides that "in case of extension, even silent, of the rental contract, the option for the regime of dry coupon must be exercised within the registration tax payment deadline through the presentation of the form for the request for registration of deeds and for subsequent obligations."
It follows that the taxpayer can exercise the coupon option even during the contractual extension. Having said this, however, what must be done to exercise this option?
To clarify this aspect, the Agency refers to circular no. 8/E of 2019, which specifies that the option for the flat rate tax regime must be exercised when registering the contract and that it produces effects for the entire duration of the agreement, unless revoked.
In essence therefore, if the dry tax option is not exercised at the time of signing, it can always be remedied when the annual registration tax is paid through the Revenue Agency's telematic services (RLI or RLI-web software) or by presenting the RLI form at the office where the rental contract is registered, within 30 days of the expiry of the same or of a previous extension.
Grimaldi Padua
Padua - 35137 - Via G. Matteotti, 27
e-mail: padovacentro@grimaldifranchising.it
Tel. +39 49 663 033 - VAT number 05301660287
Grimaldi Cadoneghe
Cadoneghe (PD) - 35010 - Via G. Franco, 2/A
e-mail: cadoneghe@grimaldifranchising.it
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