Withholding Tax on the Condominium Manager's Fee

The fee paid to a condominium manager is, as a rule, self-employment income. On it the condominium, as a withholding agent, applies the 20 percent advance withholding under Article 25 of Presidential Decree 600/1973, pays it to the tax authorities and certifies it. In practice the manager receives the fee already net of the withholding, which is later recovered in the income tax return by offsetting it against the personal income tax due.

Why the fee is subject to withholding

The manager's activity, whether carried out professionally or occasionally, generates self-employment income. Article 25 of DPR 600/1973 requires anyone paying self-employment fees to apply an advance withholding. Since the condominium is a withholding agent, this obligation falls on it and is fulfilled by the manager, who in this case acts on behalf of the entity he represents.

The 20% withholding is distinct from the 4% on works and services contracts: the former concerns self-employment, the latter services rendered by businesses. Confusing the two is one of the most frequent mistakes.

How the 20% is calculated

The withholding applies to the taxable fee. Here is a concrete example with a VAT-registered professional under the standard regime.

• Professional fee: 2,000 euros
• Any statutory surcharge or recourse contribution due to the relevant professional fund
• 20% withholding on the taxable fee: 400 euros
• Net paid to the manager: fee plus any surcharges, less the withholding
• VAT added to the invoice if the manager operates under the ordinary VAT regime

The withholding does not increase the cost for the condominium: it is a portion of the fee paid to the State on the manager's behalf. Note the flat-rate regime (regime forfettario): those who adopt it are not subject to withholding, because their income is already taxed with a substitute tax. In that case the manager states on the invoice that the fee is not subject to withholding under the flat-rate rules, and the condominium withholds nothing.

Tax code 1040 and payment

The withholding on self-employment is paid with the F24 form, Treasury section, using tax code 1040, which refers to withholdings on self-employment income and fees for the exercise of arts and professions. Payment must be made by the 16th of the month following the fee payment. Unlike the 4% withholding on contracts, the manager's fee is not subject to the 500-euro threshold with half-yearly payment: the ordinary monthly rule by the 16th applies.

Single certification and 770 return

The condominium must issue the manager the Certificazione Unica stating the fee paid and the withholding applied, and include the transaction in the 770 return. The CU must be delivered to the recipient and sent to the Italian Revenue Agency by 16 March of the following year; the 770 is filed by 31 October. The manager uses these documents for his own income tax return.

The fee must be approved by the meeting

Under civil law, the manager's fee must be specified when the appointment is accepted, on pain of nullity of the appointment, as required by Article 1129 of the Italian Civil Code. A clear resolution on the fee, including any extraordinary activities, avoids disputes and makes the tax treatment of the sums paid transparent as well.

Mistakes to avoid

The most common errors are: applying the withholding to a manager under the flat-rate regime, forgetting to apply it on an occasional fee, using the contracts tax code instead of 1040, and paying after the 16th. In the event of omitted or late payment, voluntary correction (ravvedimento operoso) is available, with a reduced penalty and statutory interest proportionate to the delay.

Automating the withholding calculation on the fee, the F24 preparation and the CU output reduces the risk of errors and missed deadlines. AmministraPro manages fees, withholdings and certifications in an integrated way: you can find the feature details on /funzioni and the plans with costs on /prezzi.