In the construction sector, “hot rental” services, provided alongside equipment rental, may not be considered subcontracting if they lack organizational autonomy. The term “hot rental” refers to a contractual arrangement where the lessor offers not only tools and equipment (e.g., scaffolding or cranes) but also an employee with specific skills to operate them to the lessee.
In 2023, the Italian Court of Cassation issued rulings (orders no. 11001 and no. 11003) regarding the applicable VAT regime for such agreements. The court determined that “hot rental” services provided to a contractor should not be treated as subcontracting and should instead be subject to regular tax rules. Therefore, the reverse charge mechanism, typically applicable to construction services under certain conditions, does not apply to “hot rental” services, as they do not qualify as subcontracting within the meaning of the law.
In the cases reviewed by the Court of Cassation, a company engaged in urban development projects through a construction contract and requested “hot rental” services from a third party. These services were initially categorized as subcontracting based on administrative regulations in the public procurement code (at the time of the events).
Source: eutekne.info
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