How to handle the withholding on works bank transfers

1. What the withholding on transfers is

The withholding on facilitated transfers is a deduction that the intermediary, bank or post office, automatically makes when it receives a dedicated transfer for works giving a right to a deduction. The current rate is eight percent, calculated on the amount of the transfer net of VAT.

The intermediary pays the withholding to the tax authority and certifies it to the contractor, who will offset it against their own taxes. For the condominium the amount owed to the contractor does not change: the withholding only reduces the sum the contractor actually receives, because it is an advance on their taxes.

2. When it applies

The withholding is triggered only on dedicated transfers made for works giving a right to deductions, such as building renovation or energy efficiency works. A normal transfer for ordinary expenses is not subject to this withholding.

This is precisely why using the correct channel is essential. The dedicated transfer must carry the reason line referencing the deduction rule, the tax code of the condominium as payer and the tax code or VAT number of the beneficiary contractor. Only then can the contractor benefit from the deduction and the intermediary correctly apply the withholding.

• Only on dedicated transfers for deductible works
• Rate of eight percent on the taxable base
• It does not apply to ordinary payments

3. Why it is not a cost for the condominium

A frequent misunderstanding is to think the withholding is an extra expense. It is not. The condominium owes the contractor the full amount of the invoice or state of progress and transfers it in full: it is the intermediary that withholds the eight percent and pays it on the contractor's behalf.

The contractor therefore receives less than invoiced, but recovers the difference as an advance already paid on their own taxes. Sometimes the contractor asks the condominium for a top-up payment to offset the withholding: this request must be refused, because the withholding concerns the contractor's taxation, not a debt of the condominium.

4. The condominium as withholding agent

Besides the bank withholding on facilitated transfers, the condominium acts as a withholding agent in other cases, for example on fees to professionals or on certain services. These are different mechanisms not to be confused: the withholding on facilitated transfers is made by the bank, not by the condominium.

The manager must however keep the documentation orderly: invoices, transfers, certifications and, where the condominium acts as a withholding agent, the withholdings to be paid and declared. Confused management of these obligations can generate errors in payments and in the annual certifications.

5. Record the amounts in the accounts

In the accounts the condominium records the cost of the works at the full amount of the invoice or SAL. The dedicated transfer moves cash for the whole amount, while the eight percent withholding is a tax matter of the contractor, not a movement of the condominium.

With software such as AmministraPro the manager records the invoice, links the payment by dedicated transfer to the approved state of progress and keeps the tax documentation together with the works file, reducing the risk of errors. The features are described on the funzioni page and the plans on the prezzi page.

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