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Italy is looking to address its air pollution problem by creating an initiative to incentivize people to purchase more eco-friendly vehicles. In December 2018 Italy's upper house of parliament approved this budgetary plan including a new ‘subsidiary’ eco-tax scheme. It is described as a levy on cars with carbon-dioxide outputs that fail to meet new lower emission standards [3]. It rewards people with up to a €6,000 discount to buy electric or hybrid vehicles and punishes those with a tax who choose to buy non-eco-friendly vehicles. The goal of this is to incentivize Italian people to purchase green vehicles over gas-guzzlers [3]. The incentives will total up to be 300 million euros a year [4].

This policy applies to new vehicles purchased starting from March 1st of 2019 to December 31st of 2021. [1] Vehicles that are leased and registered in this time frame are also included. There is no tax on cars already in circulation or bought used cars. Vehicles included in this eco-bonus are cars, mopeds, scooters, and motorbikes. Cars purchased on a loan are also included. This eco-tax excludes compact economy cars or vehicles that can carry more than eight passengers [1]. Vehicles with a listed price of less than €50,000 are also included in the eco-tax. Compact economy cars are not included along with electric or hybrid two-wheelers with a maximum of eleven kilowatts of power.

Part 1 : Eco-tax

The first part of this eco-tax is the additional surcharge that buyers must pay if the vehicle they purchase does not meet emission standards [3]. Vehicles are classified as polluters when they emit 110 grams or more of CO2 per kilometer. The tax these car buyers face starts at €150 and rises to €3000 for the highest polluters.

This is how much will be added to the price of the tax depending on how many grams are produced per kilometer: [2]

-161 to 175g/km: €1,100

-176 to 200g/km: €1,600

-201 to 250g/km: €2,000

-Over 250g/km: €2,500

Part 2 : Eco-Bonus

The second part of this budget law is the eco-bonus.

The bonus is based off several things:

-vehicle type

-amount of CO2 emissions produced

-whether the buy is trading in an older vehicle

In order for the bonus to be applied to a vehicle, the vehicle must produce less than 70 grams of carbon dioxide per kilometer. Two-wheelers must be electric or hybrid, with a maximum power of 11 kilowatts, and must be replacing a higher-emitting model.

This is how the eco-bonus is calculated: [3]

-Cars emitting less than 20g of CO2 per km: €6,000 (with the trade-in of a Euro 1-4 rated car)

-Cars emitting less than 20g of CO2 per km: €4,000 (without trade-in)

-Cars emitting 70g to 20g of CO2 per km: €2,500 (with trade-in)

-Cars emitting 70g to 20g of CO2 per km: €1,500 (without trade-in)

-Electric or hybrid two-wheel vehicles: 30% discount on the purchase price (up to €3,000 excluding VAT) with trade-in of a similar vehicle rated Euro 0-2.

Both the eco-tax and the eco bonus are applied to the price at the time of the purchase.

What this means for expats living in Italy

Expats are people who live outside their native country. So, expats in Italy are not Italian citizens. They are citizens of another country. This tax should not affect expats any differently then it would a native Italian person who purchases a car or a motorcycle. There are different rules and regulations for the sales and the use of cars for expats from the EU and non-EU countries.

Rules for EU citizen Expats: [3]

-free to purchase a vehicle whether they live full time in Italy or not.

-must be legally registered after buying the car

-proof of health insurance card

Rules for non-EU citizen Expats: [3]

-Must have proof of residency and must provide documentation before driving off the lot with the car

- Proof of automobile insurance

- A codice fiscale (personal tax code)

- Passport or government-issued identity card

-Must be legally registered after buying the car

-must have proof of residency

-must have proof of a long-stay visa

The rules of the road in Italy: [3]

To drive a vehicle in Italy, one must have a valid driver's license. A license issued by an EU member state is valid for use anywhere in the European Union. One does not have to exchange for an Italian driver's license. If someone is a migrant from a non-EU country they may only drive within Italy for a maximum of one year from when they acquired their residency. The Italian government recommends drivers to obtain an International Driver's license during this period and then, by law, they must obtain an Italian driver's license.

Steps to get Italian Driver's License: [3]

-be 18 years of age or older

-obtain a medical certificate from a doctor

-take the theoretical test to obtain learner's permit

-pass road test

-Obtain car insurance

-pay a fee

The controversy:

Unions have warned that tens of thousands of jobs could be at risk in Italy's auto industry. If vehicles are taxed more the dealerships will take the hit. The government doesn't want to cause stress to families of lower incomes. So, cars already in circulation will not be affected. But people on the lower-income bracket still need to buy new cars when their current ones break down. Not everyone can afford an electric or hybrid car. This tax is targeting the class of people who can afford the nice eco-friendly cars that the upper-class Italians can buy.

Work cited:
[1] https://ilglobo.com.au/news/42456/italy-introduces-tax-for-high-emitting-cars
[2] https://www.thelocal.it/20190301/italy-introduces-eco-tax-on-polluting-cars
[3] https://www.expatfocus.com/italy/living/how-might-italys-new-eco-tax-affect-expats-5605
[4] https://www.reuters.com/article/us-italy-cars-incentives/italy-proposes-measures-to-spur-sales-of-low-emission-cars-idUSKBN1O41MU
[5] http://www.ansa.it/english/news/2018/12/06/confusion-over-new-eco-tax-on-cars_e6f22696-7e7a-4e18-adca-7bcb31b18536.html