- No adjustment needed if the VAT deduction amount does not change
- Different use of a property does not always affect the deducted tax
- Real estate companies often buy buildings under construction or needing renovation to work on and then sell
- If the market conditions are poor, the property might not sell and can be temporarily leased out
- It is important to determine if this leasing requires an adjustment of the VAT deduction made at the time of purchase
- Article 19 of DPR 633/72 allows VAT deduction on goods and services used for taxable operations from the time of purchase
- If there is a discrepancy between the planned and actual use of goods and services, an adjustment is needed only if it affects the deduction amount
- Article 19-bis2 of DPR 633/72 outlines three scenarios for VAT deduction adjustment
- Specific adjustment due to change of use when goods and services are used differently affecting the deduction amount
- Generalized adjustment due to extraordinary events changing the deduction amount
- Adjustment due to changes in the pro-rata deduction percentage if it varies by more than ten points for exempt operations
- Buildings are considered depreciable assets with a ten-year adjustment period from purchase or completion
- A case was reviewed where a company bought a building to renovate and sell but ended up leasing it for tourism due to lack of sale
- The tax administration concluded that the different use as a tourist rental did not necessitate a VAT deduction adjustment
Source: eutekne.info
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
