The “cedolare secca” tax regime and rents of immovable property for business: contracts renewed in 2019

The “cedolare secca” tax regime on rents for business use arising from contracts entered into or renewed in 2019 is also applicable to years subsequent to the first if the taxpayer has not opted for this regime when registering or renewing the contract. This is what emerged from answer number 388 of 22 September 2020 to the question proposed by a taxpayer.

The case dealt with by the Inland Revenue concerns a person who, outside the exercise of a business activity, has rented in 2013 an immovable property with cadastral classification C/3 for the duration of 6 years, tacitly renewable for another 6 years. The contract was tacitly renewed in 2019 and the registration tax was paid. The taxpayer asked the Inland Revenue Agency to apply the substitute tax scheme starting from the years following the renewal, given that he could not exercise the option during the renewal having already paid the registration fee.

The “cedolare secca” is an alternative tax regime to the ordinary IRPEF, registration tax and stamp duty, and that the option for this regime must be exercised at the time of registration of the lease with effect for the entire duration of the contract unless revoked., so the Inland Revenue in its response gave the chance to adopt for the cedolare tax regime from 2020 because :

– These were rents resulting from a lease renewed in the year 2019;

– the leased commercial real estate has the characteristics reported in Article nr.1, paragraph 59 of the Italian Budget Law for the year 2019.

With reference to the proposed case, therefore, for contracts expiring during 2019, when the natural expiry of the contract occurred, the taxpayer could adopt for the alternative taxation regime to the ordinary one since the renewing of the contract is simlar to a conclusion of the lease contract. The taxpayer may have access to “cedolare secca” not from the first year but from subsequent years if he has not exercised the option at the time of registration. The option for subsequent years must be exercised within the deadline for the payment of the registration tax due annually on the amount of the rent for each year within 30 days of the expiration of each year.

In the latter case, the exercise or modification of the option may be made through the agency’s telematic services (RLI software) or by submitting the completed RLI form to the office where the contract was registered.

Antonio Della Corte