The VAT reduced rate (10%) applies to the provision of service and supply of equipment and materials related to the supply of thermal energy for domestic use through public networks of district heating or in the scope of energy service contracts.
The same reduced rate also applies to the supply of energy produced from renewable sources or from high performance cogeneration plants.
The standard rate (22%) applies to the supply of energy from other sources, under any form.
According to the interpretation of the Italian Tax Administration, a VAT taxable person can not benefit from the reduced rate provided for the energy for domestic use even if it acts as owner and operator of collective buildings.
If certain conditions are met, the apartment buildings can benefit from the reduced rate.
Source: Italian Tax Administration – Letter ruling No. 460 of the 7 July 2021 (in Italian)
Fausto Capello
Gianni & Origoni
