Italy scraps vehicle tax for millions of car owners

The Italian government has approved the abolition, starting in 2027, of the annual vehicle ownership tax - bollo auto - for low- and medium-power cars and motorcycles. The government estimates the exemption will cover about 14.5 million vehicles.

Passenger cars with petrol and diesel engines, including hybrids, with power up to 80 kW - about 109-110 horsepower - will be exempt from the tax. The power of a vehicle in Italy can be checked on the registration certificate in field P.2.

The exemption applies to only one vehicle per individual. If an owner has several cars that meet the requirements, the tax exemption applies to the least powerful one. If the power is the same, the car for which the tax would be lower without the exemption is chosen.

The new rules also apply to motorcycles and scooters. However, due to the "one exemption per person" principle, a motorcycle owner who also has a car with power up to 80 kW cannot use the exemption separately for both vehicles.

The exemption applies to payments normally due between January 1 and December 31, 2027. For now, the decision applies to only one year. The government says it intends to make it permanent later, but that will require a separate decision when preparing the next budget.

According to Italian government estimates, the abolition of the tax will cost regions and autonomous provinces about €2.3 billion. The state plans to compensate this amount with transfers from the central budget.

Popular models with certain versions fitting the 80 kW limit include, according to Corriere della Sera, the Fiat Pandina, Dacia Sandero, Citroën C3, Toyota Yaris, Renault Clio, Volkswagen Polo, Peugeot 208, Opel Corsa, Hyundai i20, and Lancia Ypsilon. However, what matters is the power of the specific variant, not the model name.

Cars with power over 80 kW will continue to pay the bollo under current rules. Electric vehicles are not separately included in the new exemption scheme; in Italy they already benefit from existing regional tax breaks.

Sources: Corriere della Sera, Corriere Motori