The payment of the IMU in some cases leads to exemption from income tax

In the rules IMU there is a substitution mechanism that allows you to not pay income tax on income from land. The exclusion from the tax base is on vacant properties. From the houses rented to non-fallow land, buildings uninhabitable, the main house partially rented, in some cases, payment of the IMU involves exemption from income tax. The explanations in a circular of the Revenue, we see case after case.

With the Monti government came the introduction of the IMU on the houses of Italians. The high impact of this tax on household finances Italian has had a remarkable impact in the media. Well, the payment of this tax may result in some savings on the other sets very widely applied in Italy, namely the income tax personal income tax which they are subject to all holders of an income. On income from land there is a mechanism to replace Income Tax by the IMU. It 'possible that you do not pay the income tax on houses and other property not leased on which it was paid IMU. Important notice in view of the submission of the tax return, model 730 2013 or Act, 2013, and especially in view of the payment of income taxes due to an adjustment of 2012 (if any recalculation of the deduction in payroll).

From 2012 in all municipalities of the country applies its own council tax (IMU). The IMU, by express provision of law, replaces both the municipal property tax (ICI), and, for the real estate component, the tax on personal income tax (PIT) and the relevant regional and municipal surtaxes due in reference to income from land concerning the property is not rented. And to this change coming for clarification in terms of application, case after case.

The Inland Revenue has issued circular no. 5 / E to provide some clarification on the effects on the relevant Income Tax and Additional arising from the IMU. Then we explore how Income Tax is being replaced by the IMU and especially in such cases, having paid the IMU, you can not pay the income tax due on those goods, in fact, the substitution mechanism provided for by the legislation that regulates its own council tax (IMU).

For the IMU such as income replaces the income tax personal income tax

Relation between IMU and income taxes (PIT): The circular no. 5 / E of 11 March 2013 clarifies what are the effects of the IMU on the tax base for the calculation of tax payable by the taxpayer. Article. 13, paragraph 1, of the Law Decree no. 201 of 2011 established experimentally the IMU from the year 2012 onwards, and envisaged the application under Articles 8 and 9 of Legislative Decree no. 23 of 2011, mutatis mutandis. And in this Decree is a provision that allows those who have paid the IMU to spare to pay Income Tax.

The replacement IRPEF by the IMU. Article. 8, paragraph 1, of Legislative Decree no. 23 of 2011 contains a provision first principle in relations between the IMU and the income tax, stating that the IMU "substitutes for the real estate component, the tax on personal income tax and the related additional due in relation to income from land related to assets not leased, and municipal property tax (ICI). "

Non-deductibility of the IMU. Article. 14, paragraph 1, of Legislative Decree no. 23 of 2011 also contains a second provision of principle concerning the relationship between the IMU and other taxes, as it provides that "The council tax is deductible from your state tax on the income tax and the regional tax on productive activities." So, the IMU is not deductible from taxable Income Tax, the tax on corporate income tax (IRES) and regional tax on productive activities (IRAP).

While the non-deductibility of the IMU for income tax, IRES and IRAP noted that it is possible to "scale up" the same amount of taxes paid IMU, or better said, it is not possible with the IMU reduce these taxes through the reduction of the tax base on which they are calculated, on the other hand, the first provision, concerning the replacement Income Tax by the IMU is particularly important for taxpayers who have paid the IMU, because in this case through the ' their council tax (IMU), you can not pay Income Tax. To clarify everything, especially about the various specific cases, comes the circular no. 5 / E of 11 March 2013 the Inland Revenue.

Which incomes are replaced. Clear that there is a principle of substitution Income Tax, to define what are the income replaced municpal own (IMU) is necessary to reread the art. 8, paragraph 1. The rules governing the IMU, as mentioned, they provide for the substitution effect and the real estate component, Income Tax and the related additional due in relation to earnings related to assets not leased land (the aforementioned art. 8, paragraph 1 of Legislative Decree no. 23 of 2011).

What are the leased assets where the IMU does not replace the personal income tax. At this point, it is clear that income and on land leased assets that you can save the personal income tax, which is good to fit these goods are not leased that will help you save income tax after paying the IMU. The circular n.3/DF of 2012 the Department of Finance states that the phrase "not leased goods" includes:

- Buildings not rented and non-rented;

- The land is not leased;

- Vacant properties loaned free of charge;

- Buildings for mixed use of the professional.

It should be said that such properties are covered by the IMU not only in the event that do not result leased, but also in that they are not rented. The substitution effect is expressed IMU-income tax on income from land resulting from land to the component dominicale, and buildings, not leased and not leased. The same circular has clarified, that is, in the event of falling vacant properties, in addition to those required to, even those loaned free of charge and those for the mixed use of the professional.

The income is not replaced dall'IMU on which you pay the tax. While there are goods on which produces the substitution effect IMU-income tax, the provisions governing the IMU listed explicitly in relation to income which does not have the effect of substitution and that, therefore, continue to be subject to ordinary income tax revenue tax (Article 9, paragraph 9, of Legislative Decree no. 23 of 2011). Included on the list, in particular:

- Agricultural income referred to in Article 32 of the Tax Code (soil cultivation, forestry, animal husbandry etc.).

- The income from land other than those covered by the flat rate tax (ie income from buildings relating to leased assets other than those covered by the flat rate tax);

- Income from freehold non income-producing land in accordance with Article 43 of the Income Tax Code (capital goods for the exercise of trades and professions);

- Income from property held by taxable persons IRES.

There are other hypotheses, wineskin to those indicated, in which the substitution effect does not work because the property is not income-producing land. For example, the personal income tax applies:

- The income from land leased for non-agricultural uses, as the land shall not be considered income-producing dominicale, but different incomes;

- Compensation for employment, also considered other income.

The substitution effect IMU and the exclusion from taxable personal income tax

What does the exclusion from income for income tax purposes: Clarified the cases in which the effect replacement IMU-income tax, it should be specified better what is fiscally replacement. With regard to the substitution effect and the circular no. 5 / E of 11 March 2013 shows that with respect to taxes on income, art. 3, paragraph 3, of the Tax Code establishes the general principle that "I am in any case be excluded from the tax base: a) income exempt from tax and those subject to withholding tax as tax or withholding tax;".

The exclusion from taxable personal income tax has no effect on the determination of total income, as well as on the determination of deductible expenses and tax deductions Relate to the total income, unless there is a specific provision providing for the obligation to take account of income excluded certain purposes, such as, for example, the verification of attributable tax benefits.

Although the IMU has the nature of the income tax, the substitution effect of Income Tax, says the circular, is realized as part of the Tax Code by excluding from the tax base Tax on the income produced by the land property not rented or leased subject to IMU, with effects similar to those resulting from art. 3 of the Tax Code as described above.

The full substitution effect also stems from the consideration that, in the provisions governing the IMU, there is a provision similar to that of paragraph 7 of article. 3 of the Legislative Decree no. N. 23 of 2011 that, in regulating the substitute tax referred to as dry coupon, states that "When the current provisions refer to the recognition of or pertaining to the determination of deductions, deductions or benefits of any kind, including non-tax, to the possession of income requirements, takes account also of income subject to withholding. ".

 

The principle of substitution also affects the threshold of 500 Euros of revenue land. The aforesaid principle of substitution also affects the application of Article. 11, paragraph 2-bis of the Consolidated Income Tax Act which states that "If the total income contribute only income from land referred to in Article 25 of the total amount does not exceed EUR 500, the tax is not applicable."

So, according to the circular of the Revenue, "given that income from property not rented or leased for which the IMU is due not only contribute to the formation of the tax base income tax, in verifying exceeding the limit of 500 euro need not consider the income of the properties for which it is due only the IMU. "

The compilation of the tax return. The taxpayer is required to indicate in the model 730/2013 or Unique Individuals, 2013, in the paintings of income from land and buildings, the data relating to all land and buildings owned, including those whose incomes are replaced by dry coupon and from 'IMU.

Exempt from submitting the tax return. The principle that the IMU substitute for the real estate component, and the income tax payable in respect of the additional income related to assets not leased land, also has an impact on the level of declaratory obligations, integrating the exemptions from the obligation to submission of the tax return. The taxpayer who has only replaced dall'IMU income is not required to file a tax return, and if it also has other income is invited to check in the instructions to the declaration models 730 and PF ONLY if your particular situation is one of the cases of exemption.

Personal income tax on property exempt from IMU and the case of greenfield land

Income on property exempt from IMU subject to income tax: The circular of the Revenue has clarified when producing the substitution effect, ie when the taxpayer has paid the IMU on those assets not leased. In the case of property exempt from IMU, art. 9, paragraph 9, of Legislative Decree no. 23 of 2011, as amended by Decree Law no. 16 of 2012, specifies that "I am still subject to income taxes and the related additional, when due, the property exempt from municipal own (IMU)."

The circular no. 3/DF of 2012 makes it clear that the phrase "when due" is intended to emphasize that, at a time when there is an exemption for IMU, they still continue to apply its ordinary rules governing the income tax and the related additional .

Moreover, they are subject to personal income tax and the related additional, when due, the property exempt dall'IMU made of the land of art. 7, paragraph 1, lett. h) of Legislative Decree no. n. 504 of 1992. In this regard, circular no. 5 / E of 2013 points out that the application of the IMU to the "wasteland" sites in the mountain and hill areas has been the subject of a parliamentary question to the Minister of Economy and Finance.

The Secretary for Economy and Finance said that "Article. 7 D. Decree no. 504 of 1992, which also applies IMU provides for exemption from payment of tax for agricultural land falling in mountainous or hilly areas, demarcated under Article 15 of the Law of 27 December 1977, no. 984. The fallow land falling in the mountain and hill areas, therefore, on the basis of strictly literal interpretation of the legislation, not eligible for exemption provision, as are beyond the definition of 'agricultural land' referred to in that Article 2 of Decree Law n. 504 of 1992.

The uncultivated land covered by the exemption IMU. A systematic reading of those provisions leads to the conclusion that, within the scope of the exemption, should also fall under the fallow land having the characteristics referred to in Article 7, because, he insists, than ICI, on the assumption IMU is part of the possession of any property. To confirm this, in the Decree of the Minister of Economy and Finance of 30 October 2012 and explains the conditions of the exemption and, among these, is done, in general, refers to 'land falling in mountainous areas and hill "and not only to those agricultural land, thus demonstrating the intent to exclude from being subject to the tax in question also called the land uncultivated. At this point, being free from IMU, are subject to PIT.

Rural buildings used for corporate and personal income tax-free IMU. In the circular no. 3/DF of 2012 also stated that they are not subject to income tax and the related additional rural buildings for instrumental use of art. 9, paragraph 3-bis of Legislative L. n. 557 of 1993, located in the municipalities classified mountain mountain or partially included in the list of Italian municipalities prepared by the National Institute of Statistics (ISTAT), free dall'IMU to the provisions of art. 9, paragraph 8, of D. Decree no. 23 of 2011.

Replacing IMU-income tax in the case of renting the main house or property for part of the year

Clarified that the mechanism of replacement income tax - IMU acts against income from land to property not leased, there are special cases on which the Internal Revenue Service has placed its attention, in order to clarify the application of Irpef in cases where it is due to the IMU and thus can rely on the principle of replacement, but he was also leased the property, so it may be worth replacing. This is the case under which the lease of the only part of the year, and therefore not for the whole year, or the case in which the taxpayer uses the dwelling as the main part of but within grants it leased.

In these cases, it is good to clarify how does the IRS in terms of inclusion of income in the tax base for the calculation of Irpef.

The partial exemption, ie when there is the leased property to a part of the year, involves the application of a specific computing system.

IMU and personal income taxes on the property uninhabitable

The circular no. 5 / It also clarifies the case of buildings unfit for use on the application of the substitution principle Irpef by IMU: With regard to the property uninhabitable, Article 13, paragraph 3, of Legislative Decree no. 201 of 2011, features the letter. b) that the taxable amount IMU is reduced by 50 per cent "for buildings declared unfit or uninhabitable and in fact not used, limited to the period during which those conditions exist."

Assessment dell'inagibilità. The unavailability or uninhabitable is determined by the municipal engineer with expertise borne by the owner, who attach appropriate documentation to the declaration. Alternatively, the taxpayer has the right to submit a substitute statement under the consolidated text of the decree of the President of the Republic of 28 December 2000, n. 445, than expected from the previous period. For the purposes of the application of reduction to half of the tax base, municipalities may regulate the characteristics of decay of the building occurred, can not be overcome with maintenance.

Under the principle of substitution IMU-income tax, for property uninhabitable for which compliance with all the provisions of art. 13 mentioned, is due solely to the IMU. In fact, even if in this case the IMU is due to a limited extent, as the tax base is equal to 50 percent, the property can not still be considered "exempt" from IMU and, therefore, the effect operates replacement IRPEF. So in the case of property is uninhabitable due to the IMU to 50%, instead of the personal income tax is not payable (exclusion from the tax base).

Assets owned by partnerships

Another case dealt with by circular no. 5 / E is that of the assets owned by partnerships. For income from land, related to non-rented, owned by partnerships, joint case in the farming sector, to be considered:

- Simple partnerships are not taxable personal income tax;

- Unlike the partnership business, where the income comes from any source is considered business income, in simple societies the income keeps the nature of the category in which it is classified;

- For practice of the tax authorities, the income of the investment in partnerships defendants for transparency to shareholders who do not hold any participation in regime remain firm in the hands of the latter, the same kind of income from which they proceed.

Consequently, the Inland Revenue believes that the substitution effect should be applied to the consortium partners individuals who do not hold any participation in regime of enterprise, for the proportion of participation income attributable to income from land in respect of which operates the 'substitution effect.

For the operational profile, the statement of income distribution transmitted by the company to the shareholders simple individuals must be the share of income of the participation of members corresponding to the income dominicale of non-rented land or income of the non-leased for which the opera ' substitution effect. In the simplest case the company is also owned by shareholders who operate under business, the substitution effect is not produced in the hands of the latter and the share of participation income corresponds to income dominicale of non-rented land or income of the leased buildings that are not included in the calculation of the revenue of those members.

 

20/03/2013

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Translated via software

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Source:

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