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3 November 2020

Tax news: The waiver on rents will only cost your lessor 39% of the amount of its rent

The Government announced a tax credit of 30% of the amount of rent waivers granted in the 3rd quarter by landlords in favor of companies with less than 250 employees, administratively closed or belonging to the “Hotels-Cafés-Restaurants” sector.

This mechanism, intended to support businesses suffering economic difficulties due to the latest emergency measures taken by the Government while dealing with the health crisis, shall be a huge incentive for donors. It reduces the effective cost of this rent waiver for the lessor to 42% of the amount of their gross rent, abandoned for lessors with a turnover of less than € 250 million, and 39% of the amount for those with a turnover of over € 250 million.

For example, an annual rent of € 12,000: if the lessor waives 1 month’s rent, i.e. 1,000 € gross, it will cost him only 420 € (after payment of his IS and imputation of his tax credit), or even 390 € (for lessors whose turnover is over € 250m).

This measure promises, therefore, to be very effective in encouraging lessors to make greater efforts, as part of the new negotiations underway with their tenants.