Annual registration tax
The amount of bollo varies among regions; therefore, the annual registration tax is a regional tax. The Italian transportation ministry (and its European counterparts) discourages cars with powerful engines or high fuel consumption by taxing them more. The rate is based on several major factors.
1. The emission standard: Euro-0 to Euro-6 (as of 2013). The higher the rating, the lower the base line tax.
2. The engine power: the higher horsepower or kilowatt (kW) output of the engine, the more you pay. Depending on factor #1, there is a fee for every kW until 100kW, after 100kW, a higher rate applies. One horsepower (HP) is equivalent to about 0.75kW.
3. What region you are
For example, if you have a 250 horsepower Euro-4 car with gasoline-engine registered in Veneto. The baseline is €2.84 per kW unit up to 100kW. First convert the horsepower to kilowatt: 250 x 0.75 = 187.5kW. The first 100kW will cost about 2.84 x 100 = €284
Since it’s over 100kW, the remaining 87.5kW are taxed at a higher rate of €4.26, which gives a total of 87.5 x 4.26 = €372.75
In total, your annual tax is €284 + €372.75 = €656.75 or almost $900 dollars. I had an eleven-year-old car that in California I was paying about $40 a year, in Italy it became about €500 or $650 a year, or more than 1500% increase!
If you ever wondered why most people in Europe drive small cars with small engines, this is one of the biggest reasons. The other one is the lack of parking small.
Still, there are some exceptions to this outrageous high tax rate through government’s effort to promote vehicles that use alternative energy.
For the first five years, starting from the first registration, electric vehicles are exempt from the registration tax. From the sixth year, the tax is 75% less than a comparable normal vehicle. Some regions such as Lombardia and Piemonte, have made the exemption permanent.
Methane Gas and GPL Vehicles
In general, vehicles powered exclusively by methane gas (compressed natural gas) or GPL (liquefied natural gas) enjoy a 75% reduction on the registration tax to comparable normal vehicle. In three regions, they offer more favorable treatment:
Autonomous province of Bolzano: Exemption of automobile tax for the first three tax periods from August 6, 2003
Piemonte: Complete exemption for gas-powered vehicles
Lombardia: Complete exemption for gas-powered vehicles
Classic cars at least twenty years old
With a certificate stating the car’s historical status (age) from the ASI (Automotoclub Storico Italiano or Italian Historical Automoto Club), a classic car is eligible to be taxed as a much reduced rate of between €25~30, €60 for the region of Tuscany.
Classic cars at least thirty years old
A classic car of this age is automatically eligible to be taxed as a much reduced rate of between €25~30.
Do you need to import a class car? Get the relevant article as part of my eBook.