The Bank Withholding on Dedicated Transfers in Condominiums

When the condominium pays for works giving rise to a tax deduction using a dedicated transfer (bonifico parlante), it is the bank or the postal service that applies an advance withholding on the amount credited to the firm, under Article 25 of Decree Law 78/2010. This withholding is entirely different from the 4% the condominium applies on contracts: here the withholding agent is the credit institution, not the condominium, and the deduction affects the firm receiving the transfer.

What a dedicated transfer is

The dedicated transfer is a bank or postal transfer that carries the data required to claim deductions on building works and energy efficiency: the payment description with the legal reference of the benefit, the tax code of the person entitled to the deduction, in this case the condominium, and the VAT number or tax code of the firm that carried out the works. Without these elements the deduction can be denied. The dedicated transfer is therefore the technical instrument that links the payment to the benefit.

The withholding applied by the bank

At the moment of crediting, the bank or postal service withholds a percentage of the transfer amount, as an advance on the taxes due by the firm receiving the payment. It is an anti-evasion measure: it makes visible the revenue of firms working on incentivised works. The rate of this withholding has been changed several times over the years.

• Introduced by Article 25 of DL 78/2010, initially at 10%
• Later reduced to 4%
• Raised to 8% from 1 January 2015
• Increased to 11% from 1 March 2024

The bank then certifies to the firm the amount credited and the withholding applied and reports it in its own return. The firm offsets this withholding against the taxes due, exactly as with other advance withholdings.

Why it is not the condominium's withholding

It is essential not to confuse two levies that look similar but have different subjects and grounds.

• The withholding on the dedicated transfer is applied by the bank on the firm, for payments linked to works with a deduction, under Article 25 of DL 78/2010
• The 4% withholding under Article 25-ter of DPR 600/1973 is applied by the condominium on the firm, for consideration on works and services contracts

An important administrative clarification has ruled out duplication: if payment is made by dedicated transfer and the bank already applies the withholding for deductions, the condominium does not also apply the 4% under Article 25-ter on the same payment. The two withholdings do not add up on the same consideration. The condominium applies its own 4% when it pays with instruments other than the dedicated transfer or for services unrelated to deductible works.

What the condominium must do

On the dedicated transfer side the condominium does not have to pay anything or fill in an F24 for that withholding: the bank handles it. However, the condominium must make the transfer correctly, with the exact description and codes, and keep the documentation of works and payments for the deduction. It must also assess, payment by payment, whether the 4% withholding applies instead when it does not use a dedicated transfer.

Beware of filling-in errors

A dedicated transfer filled in poorly, with an incomplete description or wrong tax codes, risks losing the deduction. In some cases the error can be cured by repeating the transfer or with substitute declarations from the firm, but it is always better to fill it in correctly on the first attempt. The benefit rule, the condominium's tax code and the executing firm's data must be indicated precisely.

Keeping the two worlds separate

In the condominium's accounts it is advisable to clearly distinguish payments made by dedicated transfer, on which the withholding belongs to the bank, from those on which the condominium must apply its own 4% or 20%. This separation avoids both duplication and omission, and is valuable when preparing the Certificazione Unica and the 770 return for the withholdings actually applied by the condominium.

Managing works payments while distinguishing dedicated transfers, contract withholdings and deduction obligations is complex if done by hand. AmministraPro tracks transfers, deductions and the condominium's own withholdings in an orderly way: the features are on /funzioni and the plans with costs on /prezzi.