Italy’s 2027 Car Tax Exemption Covers 13.2 Million Vehicles, But Many Eligible Cars Still Face Barriers
Italy’s government has announced that cars with power output below 80 kW will be exempt from the 2027 vehicle tax, but the exemption excludes nearly half of the 26.76 million eligible vehicles due to strict conditions, according to auto.everyeye.it. The rule, outlined in Article 2 of the 2026 decree-law, requires vehicles to have valid insurance, belong to individuals (not companies), and be the sole eligible vehicle per person.
Eligibility Rules Narrow Scope of Exemption
For example, a driver with cars rated at 51 kW, 66 kW, and 74 kW would only be exempt from the 51 kW vehicle’s tax. The Ministry of Transport’s data shows 13.2 million of the 26.76 million vehicles under 80 kW meet all criteria, but 5.45 million lack insurance—a 20.4% gap. This figure includes company cars, which are typically insured, suggesting the private sector’s uninsured rate is higher. The decree, published in the Official Journal on 162, entered into force on 18 September 2026, and specifies that only one vehicle per person can qualify for the exemption. For instance, a driver with two 50 kW and 74 kW cars would automatically receive the exemption on the 50 kW vehicle. Similarly, a couple with one eligible car each would each qualify for the exemption on their respective vehicles.
Regional Disparities in Insurance Coverage
Insurance compliance varies widely across regions. auto.everyeye.it reported that Southern regions like Campania, Calabria, and Sicily have one in three uninsured vehicles, while the Friuli-Venezia Giulia, Valle d’Aosta, and Trentino-Alto Adige have only one in eight. The rule also applies to hybrid vehicles, which are exempt only if their internal combustion engine’s power does not exceed 80 kW, regardless of the electric motor’s contribution. A vehicle with a total power of 130 CV, for example, would qualify if its combustion engine is under 80 kW.
FAQs Clarify Payment Deadlines and Exceptions
If a vehicle’s tax expires in November 2026, the payment is still due, as the exemption applies only to taxes due in 2027. Conversely, a tax due in January 2027 would qualify. The decree also prohibits splitting payments or requesting refunds for 2027 coverage if the tax was paid in 2026. For example, a driver with two 60 kW cars and a 35 kW motorcycle would receive the exemption on the 60 kW car, not the motorcycle. The exemption applies automatically to the vehicle with the lowest power, even if it is not the most frequently used. A driver with two 74 kW cars would get the exemption on the one with the lower tax amount, though the decree does not specify a tiebreaker in such cases.
Uncertainty Over EU Compliance and Legislative Changes
While the exemption aims to ease financial pressure on 14.5 million vehicles—over 70% of Italy’s current fleet—anap.it highlighted concerns about its compatibility with EU rules on environmental taxes and fiscal stability. The decree must be converted into law, and amendments could reduce the number of beneficiaries to meet EU requirements. However, the final scope of the exemption remains subject to legislative review.
Next Steps: Conversion of Decree into Law
The 2026 decree-law, which established the exemption, will involve regional governments receiving a €2.29 billion state fund to offset lost tax revenue, ensuring service continuity. However, the final scope of the exemption remains subject to legislative review. A driver with a 100 kW car and a motorcycle would not qualify for the exemption on the car but could receive it on the motorcycle if it meets the criteria. The exemption is also conditional on the vehicle being regularly insured, as verified by the Vehicle Registration Certificate (registration document).
More on Venezia Giulia
Related reading