New VAT Regulations for Sports Facility Renovations Coming in 2023
Legislative Decree 38/2021, set to take effect on January 1, 2023, will result in the complete repeal of Legislative Decree 2/1987. This new legislation will have a significant impact on the VAT rates applied to works carried out for the construction or modernization of sports facilities.
Currently, under Article 3-bis of Legislative Decree 2/1987, a reduced VAT rate of 10% can be applied to works carried out for the purposes outlined in the decree. However, with the upcoming repeal of this decree, the VAT treatment for these works will now fall under the general rule set forth in Presidential Decree 633/72.
In order to qualify for the 10% VAT rate for renovation works on existing properties, certain conditions must be met. These include having a procurement contract stipulated according to specific regulations and ensuring that the works fall within the prescribed categories outlined in Presidential Decree 633/72.
It is crucial for those planning renovation projects, such as upgrading changing rooms or constructing new grandstands, to carefully review the building authorization opinion issued by the local Municipality’s technical office. Additionally, any improvements made for people with disabilities may qualify for a lower VAT rate of 4%, as long as they meet the necessary criteria.
Furthermore, if multiple works are included in a single agreement, it is essential to clearly distinguish the sums collected for each service in order to benefit from the reduced VAT rate. Failure to do so could result in the entire consideration being subject to the standard 22% VAT rate.
Overall, these new regulations aim to streamline the VAT treatment for sports facility renovations and ensure compliance with the changing legislation. It is advisable for stakeholders to familiarize themselves with these upcoming changes and seek guidance from tax experts to navigate the new VAT landscape effectively.