The Draft Legislative Decree On Construction Bonuses And Tax Benefits Of 26 March 2024 – Key Aspects

As anticipated in a press release, on 26 March 2024 the Council of Ministers of Italy approved a new Draft Legislative Decree regarding Construction Bonuses and Tax Benefits.
Below is a summary of the key aspects of the Draft Decree.
 

1. Notification of the options concerning construction bonuses without remissio in bonis

The Draft Decree erases the possibility of applying for remissio in bonis (i.e. the possibility of fixing the belated notification of a requests for benefits by filing it along with the next tax declaration), as regulated in art. 2, comma 1, of Law Decree 16/2012, with regards to the obligation to inform the Italian Tax Authority of the options for the deduction or assignment of bonuses relating to costs incurred in 2023, as outlined in let. a) and b) of art. 121 comma 1 of Law Decree 34/2020.

The deadline for notification of these options remains 4 April 2024.
After that date, the remissio in bonis will no longer operate:

•  for those who are eligible for the related tax benefit but have not yet submitted the notification relating to the costs incurred in 2023 (or for the residual instalments of the costs incurred in the years 2020, 2021 and 2022) as of 4 April 2024;
• to correct the substantial errors made in notifications made by the deadline of 4 April 2024.

Pending confirmation, it should be clearly understood that the exclusion of the possibility of making use of remissio in bonis concerns exclusively the notifications indicated above (those under art 121) and not the energy efficiency declarations to be sent to ENEA and the seismic risk reduction declarations to be files at the competent municipal offices, in relation to which the Draft Decree does not contain any language, thus confirming the survival of the pre-existing regime for this kind of declarations.
 

2. Halting of the deductions and assignments options regulated in art. 121 of Law Decree 34/2020 for all construction bonuses

Starting from the date of entry into force of the Draft Decree, it will also be halted the possibility to apply the deduction or assignment options referred to in the art. 121 of Legislative Decree 34/2020, which still applied to the following cases:

• costs subject to the bonus for the elimination of architectural barriers, pursuant to art. 119-ter of Legislative Decree 34/2020;
• subsidised costs incurred by IACP (council housing) and equivalent bodies, undivided ownership of building cooperatives and non-profit organisations, APSs and ODVs, as regulated in letters. c), d) and d-bis) of paragraph 9 of the art. 119 of Legislative Decree 34/2020;
• subsidized costs relating to properties damaged by seismic events with an AeDES non-conformity certificate or equivalent document (for these properties the text of the Draft Decree could be further modified).

 
However, interim safeguard clauses are provided for construction works already in progress for which the date of presentation of the CILA-S (or other building permit required for the bonus) is prior to the date of entry into force of the Draft Decree.
 
While awaiting for enforcement, nothing seems to change for bonuses already halted in February 2023, but without prejudice to the interim safeguard rules that were envisaged at the time by paragraphs 2 and 3 of the art. 2 of Legislative Decree 11/2023.
It should be noted that Legislative Decree 11/2023 had eliminated the possibility of resorting to assignment options or invoice deduction, yet introducing safeguard clauses in cases of construction works already in progress for permitsalready filed at that time.
For example, this is the case of:

• condominium owners with a meeting resolution approving the construction works and filing of the CILA-S prior to 17 February 2023, for which the superbonus referred to in art. 119 of Legislative Decree 34/2020 (dropped to 70% in 2024) can continue to be used through options, pursuant to art. 3 paragraph 2 letter. b) of Legislative Decree 11/2023;
• natural persons or companies which have filed the CILA, SCIA or PdC before 17 February 2023 for the carrying out of energy efficiency and/or seismic risk reduction works, for which the ecobonus and/or the earthquake bonus referred to in the articles. 14 and 16 of Legislative Decree 63/2013 can continue to be used through options, pursuant to art. 3 paragraph 3 letter. a) of Legislative Decree 11/2023;
• buyers of real estate located in buildings demolished and rebuilt with reduction of seismic risk, or in buildings entirely restored or renovated, for which the so-called “sismabonus acquisti” referred to in paragraph 1-septies of the art. 16 of Legislative Decree 63/2013 and the so-called “bonus case ristrutturate” referred to in paragraph 3 of the art. 16-bis of the TUIR can continue to be used through options, pursuant to art. 3 paragraph 3 letter. c) of Legislative Decree 11/2023.

3. Active repentance extended to all years before 2022

The Draft Decree extends the special voluntary repentance pursuant to art. 1 paragraph 174 et seq. of Law 197/2022 to years prior to 2022 and, for any such case, sets 31 May 2024 as the final deadline both for paying all sums due and for ceasing the violation.
Please note that this regulation allows the taxpayer to cease some tax violations by benefiting from the reduction of penalties to 1/18 of the statutory minimum while also benefiting from the possibility of payment in installments. Looking back over the history of this benefit:

• the initial deadline was scheduled for 30 September 2023 and only concerned violations committed up to 31 December 2021;
• subsequently, the scope of application was extended only to tax declarations submitted in 2023, relating to the year 2022, yet setting the deadline for active repentance at 31 March 2024;
• now, the scope of application is extended to all years and the new peremptory deadline is set at 31 May 2024.

 
For violations concerning the year 2022, the deadlines for payment of the sums (or the first instalment) and for ceasing the violation have been postponed from 31 March 2024 to 31 May 2024; however, the terms for the payment of the remaining three instalments remain unchanged, staying set at 30 June 2024, 30 September 2024 and 20 December 2024.

For violations concerning the year 2021 and previous years, the deadlines for the payment and for the ceasing of the violation (supplementary tax declaration, correction of the invoice and periodic settlement) have been postponed from 30 September 2023 to 31 May 2024.
 
If you wish to pay in instalments, then you will need to pay the first five instalments by 31 May 2024 (due on 30 September 2023, 31 October 2023, 30 November 2023, 20 December 2023 and 31 March 2023). The terms for the payment of the remaining three instalments remain unchanged, staying set at 30 June 2024, 30 September 2024 and 20 December 2024.
 

4. Prohibition to offset the construction bonuses subject to sanctions above 10.000 Euro

Please note that the 2024 Budget Law (L. 213/2023), introducing paragraph 49-quinquies to art. 37 of Legislative Decree 223/2006, provides for a prohibition to offset in the presence of expired sanctions or executive assessments entrusted for debt collection for a total amount exceeding 100,000 euros, unless there is a judicial or administrative suspension in place.
The ban has no limits. Consequently, therefore, if there is an overdue role exceeding 100,000 euros (or several overdue roles whose total sum exceeds 100,000 euros) and the taxpayer has credits exceeding this limit, the compensation of the excess amount.
To remove the prohibition, it seems necessary to pay off the debt in full, as it might to be sufficient to pay the first instalment of the plan as per art. 19 of Presidential Decree 602/73.
The Draft Decree intervenes precisely on this provision, providing for the need to extinguish the debt in full before offsetting, this erasing the possibility to offset any sum in excess. However, it is also clarified that art. 31 paragraph 1, fourth period, of Legislative Decree 78/2010 is applicable, thus making the debt payable by offsetting the credits arising from state taxes (erario), as an exception to the prohibition on offsetting.
Furthermore, the prohibition on offsetting does not apply:

• if the taxpayer obtains an instalment plan pursuant to art. 19 of Presidential Decree 602/73, as long as the plan is in force, therefore until it expires;
• for credits relating to social security contributions and INAIL (social insurance) premiums.

 
The date of entry into force is not changed, therefore the new prohibition on offsetting applies from 1 July 2024.
 
FOR THE SAKE OF CLARITY:
the Draft Decree introduces, as a subcategory of this legislation, a specific prohibition on offsetting for credits originating from construction bonuses substantially deriving from the transfer of credit or from a deduction on on the invoice, for debts that have expired pursuant to art. 37 paragraph 49-quinquies of Legislative Decree 223/2006.
However, this prohibition has particular features, in fact:

• operates if the debts overall exceed 10,000 euros, and not 100,000 euros;
• operates if the deadline of 30 days from payment has passed, which for payment orders essentially means ninety days from notification (for enforcement assessments, it seems that in any case we have to wait for the sums being collected to be assigned);
• the offsetting “is suspended until the amounts of the aforementioned debts and liens are reached“, therefore it is possible to offset the excess (for example, if there is a debt equal to 20,000 euros and a credit equal to 100,000 euros, they can still be offset the remaining 80,000 euros);
• “the terms of use of the individual annual instalments of the credit referred to in paragraph 3 of this article remain unchanged“;
• the prohibition does not apply if a repayment plan is in place.

There is no express provision concerning the possibility of offsetting debts with credits deriving from construction bonuses, as was announced during the press conference at the end of the Council of Ministers on 26 March 2024.
The aforementioned prohibition, unless modified, will not be in force effective immediately, as it is established that its effective date will also have to be defined by the implementing regulation.
 

5. Preliminary notice for the use of 4.0 investment bonuses

The Draft Decree introduces a new provision for the purposes of monitoring the tax credit for 4.0 investments and R&D&I tax credits, which takes the form of a preliminary notice for the use of these benefits, which until now have been automatic.
The new provision concerns:

• tax credits for investments in new capital goods referred to in art. 1 paragraphs from 1057-bis to 1058-ter of Law 178/2020;
• tax credits for investments in research and development activities, technological innovation and design and aesthetic conception referred to in art. 1 paragraphs 200, 201 and 202 of Law 160/2019, including technological innovation activities aimed at achieving digital innovation 4.0 and ecological transition objectives referred to in paragraphs 203, fourth sentence, 203-quinquies and 203-sexies .

 
The notification

1. must be done electronically based on the model adopted with Ministerial Decree 6 October 2021 pursuant to art. 1 paragraph 191 fourth period of Law 160/2019;
2. is due by companies that intend to benefit from the aforementioned credits, indicating the overall amount of investments, the presumed distribution of the credit over the years and the relative use that they intend to make “starting from the date of entry into force of this legislative decree”;
3. must be updated upon completion of the investments;
4. it must also be carried out for investments made from 1 January 2024 and up to the day before the date of entry into force of the Legislative Decree in question;
5. is also due for investments in new capital goods referred to in the art. 1 paragraphs from 1057-bis to 1058-ter of Law 178/2020 relating to the year 2023; therefore, the offsetability of credits accrued and not yet used is subject to the communication referred to in the art. 1 paragraph 191 fourth period, of Law 160/2019.

As a matter of facts, this is a new take on the notification provided by the Ministerial Decree which, at present, regulates the notification to be sent ex post by the date of submission of the tax return relating to each tax period in which investments are made, which did not expressly constitute a prerequisite for accessing to the benefit, but gained relevance for the sole purpose of allowing the Ministry to acquire the information necessary to evaluate the progress, diffusion and effectiveness of the relief measures.

Taking into account the new purposes, with a specific decree of the Ministry of Business and Made in Italy, the necessary changes will be made to the aforementioned Ministerial Decree, also with regard to the content, methods and terms for sending communications.
 

6. New preliminary ruling postponed to May 2024

The Draft Decree establishes a clear starting rule for the new preliminary ruling referred to in the art. 6-bis of Law 212/2000: the new provisions come into effect from 30 April if they are favourable to the Treasury, while if they are unfavourable to the taxpayer, they will come into force immediately.