A few months ago we dealt with the two interesting tax bonuses introduced at the beginning of 2021 to encourage the rational use of water. Both concessions are conditional on the issuance of an implementing measure but, to date, only one has been launched, and that only recently.
In our previous article we had promised to monitor the implementation process of the water bonus and of the tax credit for filtering drinking water, introduced by the Budget Law for 2021 (Law no. 178/2020), both conditioned by the issuance of an implementing measure delegated, respectively, to the Ministry of Economic Development and to the Director of the Revenue Agency.
Validity of the two short-term incentives
The validity envisaged for the two bonuses, subject to future extensions, is of short duration: December 31, 2021 for the water bonus and December 31, 2022 for the tax credit for filtering drinking water: therefore, the enactment of the two implementing measures was very urgent.
Implementation of only the tax credit for filtering drinking water
At the moment, on June 16, 2021, only the Provision of the Director of the Revenue Agency relating to the tax credit to incentivize “the purchase and installation of systems for the filtering, mineralization, cooling and adding of E290 alimentary carbon dioxide to improve the quality of water for human consumption coming from the public water grid”, aimed at reducing the consumption of plastic bottles in which the water is sold, has been issued.
Beneficiaries of the tax credit
The audience of potential users is generalized:
- natural persons,
- businesses and companies,
- self-employed workers,
- non-commercial entities, including third sector entities and accredited religious ones.
The tax credit is due to subjects who bear the expenses on properties owned (with ownership rights or by virtue of beneficial rights, for example, dwelling or usufruct rights) or held (on loan or lease) based on an eligible title.
Works subsidized by the tax credit
The tax credit applies in case of expenditures made between January 1, 2021 and December 31, 2022 for the purchase and installation of systems for the filtering, mineralization, cooling and adding of E290 alimentary carbon dioxide to improve the quality of water for human consumption coming from the public water grid.
Obligation to track payments and to acquire an invoice with your tax ID code
Payments (except for companies in an ordinary accounting regime) must be carried out by tracked means (e.g.: bank or postal transfers, debit, credit and prepaid cards, bank checks and bank drafts) and it is necessary to obtain an invoice (in electronic form by the subjects obliged to do so; regular in other cases) showing the tax ID code of the customer who intends to use the tax credit.
For expenses incurred before the publication of the Provision (6.16.2021), this is without prejudice to payments made by means other than those indicated above and it is possible to integrate the invoice or commercial document certifying the expense by adding the tax ID code by hand, if missing, of the person requesting the tax credit.
Notification to the Revenue Agency of eligible expenses
In order to benefit from the tax credit for the expenses incurred for the purposes in question, it is necessary to send to the Revenue Agency, between February 1 and February 28 of the following year, a specific Notification - attached to the Provision - with the amount of the eligible expenses incurred in the previous year.
This Notification must be sent - exclusively electronically, by the taxpayer or using an authorized intermediary (registered in the register of chartered accountants or labor consultants; CAF (tax assistance center) and other subjects identified by law) - to the Revenue Agency, which within 5 days will issue a receipt certifying the acceptance or the rejection with the relative reasons, to allow a new correct notification to be sent.
Amount of the tax credit
The tax credit is equal to 50 percent of the expenses incurred and resulting from the Notification sent to the Revenue Agency, and cannot be higher than:
- - for “private” individuals - €1,000 for each residential unit;
- - for other subjects - €5,000 for each property used for commercial or institutional activity.
Without prejudice to the foregoing, the amount of the tax credit cannot be quantified precisely a priori since it will fall within the limit of the allocation established by the 2021 Budget Law (€5 million for 2021, the same for 2022). If requests exceed this limit, they will be subject to a proportional reduction for each applicant.
How to use the tax credit
The tax credit can be used up to the maximum amount available for each beneficiary in the following ways:
- by “private” individuals in the tax return relating to the year in which the eligible expenses were incurred and in subsequent ones until their use is concluded or by compensation in the F24 form;
- by other subjects, exclusively by compensation in the F24 form.
It now remains to be verified whether the Ministry of Economic Development will also issue, albeit belatedly, the decree within its scope to implement the second tax bonus - the water bonus - launched with the 2021 Budget Law, dedicated to the replacement of ceramic toilets with new low-flush models, of sanitary taps, shower heads and shower columns with new low-flow water fittings.
Article by Stefano Baruzzi
Chartered accountant and legal auditor, real estate tax expert,
Head of Real Estate Contracts, Tax & Fiscal for Morning Capital Srl