Italy introduces eco-tax on polluting cars: Here's how it works

The so-called eco-tax and eco-bonus, which applies from today until the end of 2021, are intended to address Italy's air pollution problem with a carrot-and-stick approach that pushes car buyers towards lower-emitting models.

So how does it work? Here are the basics.

Which cars does it apply to?

The scheme applies to brand-new vehicles purchased and registered in Italy between March 1st 2019 to December 31st 2021, including those bought for leasing. It does not affect cars bought secondhand or vehicles already on the road.

The eco-tax doesn't apply to compact economy cars, only to larger models. Nor does it apply to vehicles that have space for more than eight passengers. Special-use vehicles, for instance camper vans, ambulances or cars adapted for wheelchair access, are exempt.

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The eco-bonus applies to mopeds, scooters and motorbikes as well as cars. A car must produce less than 70 grams of carbon dioxide or less per kilometre to be eligible, while two-wheelers must be electric or hybrid with maximum power of 11 kilowatts and they must be replacing a more-polluting model.

Plus the new vehicle must be listed at less than €50,000 without VAT (around €55,000 with VAT).

How much is the eco-tax?

The tax is calculated according to how much carbon dioxide a car emits.

Here's how much will be added to the price depending on how many grams of CO2 are produced per kilometre:

• 161 to 175g/km: €1,100
• 176 to 200g/km: €1,600
• 201 to 250g/km: €2,000
• over 250g/km: €2,500

How do you pay it?

Either the person buying a new car or the person it's registered to can pay the tax. It should be paid using the F24 payment form that you use to pay your income taxes and other contributions, under reference code 3500. 

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How much is the eco-bonus?

The bonus depends on what type of vehicle you're buying, how much CO2 it produces and whether you're trading in an older model.

• Cars that produce less than 20g of CO2 per km: €6,000 if you're trading in a car rated Euro 1-4 for EU emissions standards, or €4,000 if not.
• Cars that produce between 70 and 20g of CO2 per km: €2,500 with a trade-in, or €1,500 without.
• Electric or hybrid two-wheel vehicles: in exchange for trading in a similar vehicle rated Euro 0-2 you can claim 30 percent off the price of a new one, up to €3,000 excluding VAT.

How do you claim it?

There's minimal extra paperwork for buyers: the bonus will be applied directly when you pay for your new vehicle in the form of a pre-tax discount. 

It's car dealers who'll have more work to do: they have to register with the government's online service and request discounts for specific vehicles. They'll then have to use the sales records to claim the discount back from the car maker or importer, which then claims the cost from the Italian government in the form of a tax credit.

For more details, see the government's information site.

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