The recent circular no. 2 of 16 July 2024 of the Ministry of Economy and Finance (MEF) has provided important clarifications on theIMU exemption for properties owned and used by non-commercial entities (Enc) for activities worthy of protection.
The innovations introduced by the 2024 Budget Law pave the way for a clearer and more detailed understanding of these tax breaks.
What are the main changes? And how can they affect the Encs?
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New features introduced by the 2024 Budget Law
The MEF circular clarifies the provisions of Article 1, paragraph 71, of the 2024 budget law (law no. 213/2023). This article serves as a rule for the exemption from IMU, specified in Article 1, paragraph 759, letter g), of law no. 160/2019.
In particular, the exemption applies to properties owned by non-commercial entities and intended for non-commercial institutional activities. The legislation aims to ensure that these entities can carry out their activities without the additional burden of tax, thus promoting initiatives of an assistance, social security, health, scientific, educational and cultural nature.
This authentic interpretation responds to several rulings of the Court of Cassation, which have defined the criteria for the application of the exemption.
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Properties granted on loan
A crucial aspect of the circular concerns the properties owned by non-profit organizations that are granted on loan. According to the law, the exemption from IMU also applies when such properties are given on loan to subjects referred to in article 73, paragraph 1, letter c), of the TUIR.
These entities include public and private entities other than companies, trusts that do not have as their main purpose the exercise of commercial activities, and collective investment schemes resident in Italy. The fundamental condition is that the borrower uses the property exclusively for institutional activities that allow the exemption to be granted.
This clarification responds to a need to precisely define the requirements for exemption, ensuring that the use of the property remains in line with the institutional purposes of the grantor.
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Functional and structural connection
The MEF circular also provides details on the concepts of functional and structural connection between the grantor and the borrower, which are essential for maintaining the IMU exemption.
For the functional connectionorder no. 27761/2023 of the Court of Cassation clarifies that this occurs when the activities carried out by the borrower in the property are strictly linked and instrumental to the institutional activities of the grantor, without profit-making purposes.
An example is the granting of real estate by a university to a regional non-profit organization for the right to university education, where the activities of the borrower directly support the institutional purposes of the university.
The structural connectioninstead, applies when the property is granted on loan to another non-commercial entity belonging to the same structure as the grantor. For example, a religious entity can grant a property to a foundation created by the same entity to carry out assistance and charitable activities.
The jurisprudence of the Court of Cassation, as in sentences no. 6795/2020 and no. 12539/2021, confirms that the relief is valid if the two entities are strictly connected and the property is used for purposes provided for by the legislation.
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Instrumentality and temporary inactivity constraint
Another important clarification of the circular concerns the maintenance of the IMU exemption even in the absence of current exercise of institutional activities in the property, provided that the definitive cessation of the instrumentality does not occur.
The legislation establishes that thetemporary disuse of the property does not automatically entail the loss of the benefit, provided that this does not indicate a change in the intended use of the property or a cessation of the instrumental relationship with the activities worthy of protection.
The rulings of the Court of Cassation have underlined that the exemption remains valid as long as the property is intended to be used for the subsidized activities.
For example, if a property used for educational purposes remains temporarily unused during periods of renovation or reorganization, the IMU exemption may continue to apply, provided that the property is used again for the same purposes once the work is completed.
