VAT in construction, at 10% for solar shading and mosquito nets

The starting point: ADE circular 15/E of 2018

The preferential VAT regime for blackout systems is based on the Revenue Agency circular no. 15/E of 2018, which in paragraph 2.2.1 clarified the tax treatment of roller shutters, shutters and Venetian blinds in the context of maintenance interventions.

The document established that these systems, with the exception of cases in which they are structurally integrated into the fixtures, have functional autonomy with respect to the main building, since they perform a different function. Therefore as such their cost does not contribute to forming the value of the fixtures as “significant assets” pursuant to the ministerial decree of 29 December 1999, but falls within the value of the provision of service subject to the 10% rate.

The same circular extended the same treatment to mosquito nets, due to their similar functional autonomy compared to window frames.

The extension to outdoor awnings and solar shading

The scope of the benefit was expanded with legal advice no. 10 of 2 October 2020, with which the Revenue Agency responded to a request presented by a trade association in the wood-furniture sector. The question concerned the applicability of 10% VAT to types of products not expressly covered by the 2018 circular: sun blinds – screens with adjustable aluminum slats functionally similar to Venetian blinds – and outdoor roller blinds, alternatives to traditional shutters.

The Agency considered that these types present similar characteristics to the darkening systems already included in Circular 15/E, as they have their own functional autonomy compared to the fixtures and are installed with the same purposes of protection from light and heat.

The technical-regulatory reference to identify the permitted categories is Annex M to Legislative Decree no. 311 of 2006, which lists the types of solar shading recognized for the purposes of energy saving benefits: external curtains compliant with the UNI EN 13561 standard, blackout closures compliant with the UNI EN 13659, sun protection devices with the thermal and visual well-being requirements of the UNI EN 14501, solar protection devices in combination with glazing with transmittance calculation pursuant to the UNI EN 13363.01 and UNI EN standards 13363.02.

The ambiguous statement and the clear answer

The consultancy reiterates the application of VAT at 10% but in relation to outdoor awnings and sun screens “installed as an alternative or in replacement of traditional darkening systems”. Two terms “alternatively” and “in replacement” which have led to the hypothesis that the VAT reduced to 10% may or may not be applicable in the case of a new installation, i.e. regardless of the presence of darkening systems (blinds, roller shutters and shutters and other) on the same property.

The response of the MEF undersecretary Lucia Albano clarified once and for all, sweeping away the misunderstandings. The text is in fact clear and the definitive indication. In light of the legal rules for tax bonuses and Revenue documents – Albano said – “it is believed that the application of the reduced VAT rate of 10% applies to the installation and/or replacement of blackout systems carried out as part of facilitated recovery interventions”.

The rules for building bonuses

As for building bonuses, it is worth remembering that the treatment varies depending on the nature of the product installed. Outdoor awnings, being an intervention aimed at saving energy but not falling within the definition of “systems”, are eligible exclusively for the Ecobonus provided for by article 14 of Legislative Decree no. 63 of 2013, within the limits and with the technical requirements established by Annex M to Legislative Decree 311/2006.

Certified solar shading, as it is integral with the building envelope, can instead access both the Ecobonus and the Renovation Bonus referred to in article 16-bis of the TUIR; the two regimes cannot be combined on the same intervention and the taxpayer must opt ​​for one of the two.

The Renovation Bonus, on the other hand, is the only tool available for roller shutters, shutters, Venetian blinds and mosquito nets, which fall within ordinary and extraordinary maintenance interventions but do not satisfy the technical requirements for access to the Ecobonus.

VAT always at 22% for direct purchases

In all cases, the reduced rate of 10% applies exclusively to the service that includes installation, both in the case of a contract and in the case of supply of the goods with installation. In case of direct purchase of the product without installation, the ordinary rate of 22% applies.

10% VAT and bonus for sunscreens: summary table

Here is a summary table on the building bonuses that can be exploited (Ecobonus or Home/Renovation Bonus), and on the applicable VAT rate, for the purchase and installation of solar awnings, certified solar shading, roller shutters, shutters, Venetian blinds and mosquito nets: