OE2022: Home appliance repairs pass to 6% VAT

Deepak Gupta April 16, 2022
Updated 2022/04/16 at 9:16 PM

Domestic appliance repair services will be subject to a reduced rate of VAT, which on the mainland is 6%. The measure is part of the State Budget for 2022 (OE2022), which the Government delivered last Wednesday to parliament.

OE2022 brings several new features.

In addition to household appliances, also the installation of solar panels

Item 2.36 includes the provision of repair services for domestic appliances which, in this way, no longer bear the normal VAT rate (23%$ on the mainland), lowering to the reduced rate.

The expansion of products and services that will be subject to the 6% rate also extends to the “Delivery and installation of thermal and photovoltaic solar panels”. [verba 2.37].”

The measure takes effect from July 1, 2022 and is a novelty compared to the budget proposal presented in October and failed by the opposition during the general vote.

The Government also foresees the creation of another category of deductions in the IRS, this time for expenses with the improvement of the energy efficiency of the houses.

These are some of the expenses that will be eligible, if the Government proceeds with this environmental deduction in the IRS:

  • sreplacement of inefficient windows by efficient windows, of class equal to “A+”;
  • Application or replacement of thermal insulation in roofswalls or floors, as well as the replacement of entrance doors, using natural-based materials (eco-materials) or incorporating recycled materials or other materials;
  • Space heating and/or cooling systems and/or sanitary hot water (DHW), using renewable energy, class “A+” or higher;
  • Installation of photovoltaic panels and other renewable energy production equipment for self-consumption with or without storage;
  • Interventions aimed at water efficiency through:
    • i) Replacement of water use devices in the home with more efficient ones;
    • ii) Installation of solutions that allow the intelligent monitoring and control of water consumption;
    • iii)Installation of rainwater harvesting systems.
  • Interventions to incorporate bioclimatic architecture solutions, that involve the installation or adaptation of fixed building elements such as shading, greenhouses and green roofs or facades, favoring natural-based solutions;
  • Purchase or installation of domestic composters or household containers intended for the selective collection of municipal waste (CAE class 22220).

The SO2022 proposal will be discussed in general in the Assembly of the Republic on 28 and 29 April, with the final global vote scheduled for 27 May.

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