Registration Tax (IRE) Determination 

Use

Companies in Italy can use the Flexible Real Estate Management solution for Italy to calculate, store, and report the Italian registration tax (Imposta di registro – IRE), according to Italian requirements.

The Italian registration tax IRE is a tax paid to the Italian authorities on the creation, renewal, or notice of a real estate contract, as specified by Italian law. This tax has to be paid within 30 days of the rental agreement being made/renewed/noticed. Either of the contractual partners can pay the IRE tax, and the amount can be shared between them in any percentage. Usually, the landlord pays the full amount to the authorities and subsequently receives 50% from the tenant.

Prerequisites

Before you can administrate and report the relevant IRE tax amounts, you have to set up the system appropriately by making certain Customizing settings. You can set up different IRE tax calculation algorithms for:

·        Contracts without VAT

·        Contracts with VAT

·        Contracts without VAT with initial accruals

·        Contracts without VAT with reduction

The system permits the following contract statuses for the definition of IRE tax:

·        At the beginning of the contract (B)

·        Intermediate year (I)

·        Renewal (R)

·        Noticed (N)

You have to define the IRE tax rates for each relevant combination of calculation type and contract status, and subsequently assign them the official IRE tax codes. To do this, and to make the other required Customizing settings, carry out the IMG activities in Customizing for Flexible Real Estate Management (Enterprise Extension) by choosing Country-Specific Settings ® Italy ® Tax Calculation for Italy ® Registration Tax (IRE).

Activities

Maintain IRE Master Data

The Flexible Real Estate Management solution for Italy enables you to administrate the IRE tax data for real estate contracts. To enter IRE tax data, proceed as follows:

       1.      On the SAP Easy Access screen, choose Accounting ® Flexible Real Estate ®Contract ® Process Contract.

       2.      On the General Data with Fast Entry tab page, select Italian Tenancy Law in the Tenancy Law field.

The IRE Data tab page is generated.

       3.      Navigate to the IRE Data tab page, and choose the Documentation icon in the IRE Overview Data dialog box for an overview of the IRE tax functions.

       4.      The system generates the first real estate record automatically, according to the contract start date. The contract start date appears in the IRE Date field, and the contract status is set to B. Enter the calculation type, according to your contract.

All subsequent IRE dates are then generated based on this calculation type, the contract end date, and the status.

       5.      Save your data.

 

To administrate IRE tax data for each contract status, proceed as follows:

       6.      Select a line in the IRE Overview Data dialog box.

       7.      In the Time-Dependent Data dialog box, enter the required data and, if necessary, select the Record Active checkbox to ensure that any subsequent changes to the IRE tax amount are not applied to your data.

The payback amount can only be posted when you have activated the record.

       8.      Select the IRE Payback checkbox if the tenant is to pay the amount back.

       9.      Save your entries.

 

The system calculates the relevant IRE tax amount. You can then execute the Italian Localization of IRE Tax report. For more information, see IRE Tax Reporting.