Limits on VAT Deductions for Residential Property Construction by Third Parties

• IVA is applied to the sale of buildings by construction companies within 5 years of completion, without exemption.
• The definition of construction companies includes those using third-party contractors for building work.
• Occasional builders, like banks, are also considered construction companies for VAT purposes.
• The Notariato states that being a construction company is linked to actual execution of building work.
• Companies using third-party contractors still qualify as construction companies and apply VAT on sales within 5 years.
• There is a restriction on VAT deduction for residential buildings.
• This restriction does not apply to companies whose main activity is construction.
• It is unclear if companies commissioning third-party construction can bypass the VAT deduction limit.
• Administrative practices suggest these companies might not be excluded from the deduction limit.

Source: eutekne.info

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

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