Summary
- Italy’s EV uptake is one of the lowest in Europe at 4%
- The newly approved budget law in Italy has introduced reforms regarding salary cars
- The law now taxes cleaner technologies differently, incentivizing electric cars with a low tax rate of 10%
- The law has raised the tax burden on petrol and diesel cars while offering tax rebates to high-emission vehicles
- Italy is pushing back against the EU’s law requiring zero carbon emissions for new cars sold after 2035
Article
Italy’s EV uptake has been low at 4%, but recent reforms in the budget law have aimed to change this by adjusting the taxation system to favor cleaner technologies. The new law taxes different types of technology rather than emissions, incentivizing BEVs with a low 10% tax rate. However, PHEVs are taxed at a higher rate of 20%, despite not being considered a clean technology. There are inconsistencies in the new legislation, such as applying the same taxation to all internal combustion vehicles, regardless of emissions.
The new legislation significantly raises the tax burden on over 80% of Italy’s annual registered salary cars, which are predominantly petrol and diesel vehicles. This creates a tax advantage for electric cars, potentially steering the market towards cleaner technologies. Italy registers 40% of all new car registrations as company cars, with half of these being salary cars. The taxation of salary cars is just one aspect of broader legislation regarding corporate fleets that needs reform, including tax parameters on depreciation write-offs and VAT deductions.
Italy’s pushback against the EU’s law requiring new cars sold after 2035 to be zero carbon emissions has become a part of the European political arena. However, Italy’s recent adjustment to company car taxation demonstrates that climate wins are possible. The country’s tweak to the taxation system shows a step towards supporting cleaner technologies in the automotive industry. The new legislation also highlights the need to address registration taxes, which are lower in Italy compared to other European countries.
The issue of the 2035 law and Italy’s stance on company car taxation are part of a broader conversation on Europe’s climate ambition. While the EU aims for zero carbon emissions from new cars by 2035, Italy’s reform in company car taxation suggests progress towards supporting cleaner technologies. The new legislation creates a gap and fiscal advantage for electric cars, potentially influencing the market towards greater adoption of electric vehicles. Italy’s reforms also point to the need for broader legislative changes regarding corporate fleets and tax advantages for cleaner technologies.
In conclusion, Italy’s recent reforms in the budget law regarding company car taxation show steps towards supporting cleaner technologies in the automotive industry. The adjustments in the taxation system create incentives for electric vehicles while raising the tax burden on petrol and diesel cars. These changes aim to steer the market towards greater adoption of electric cars and support Europe’s climate ambition. Italy’s stance on the 2035 law and company car taxation demonstrates that climate wins are possible through legislative changes. The country’s efforts highlight the need for broader reforms in corporate fleet legislation to further incentivize cleaner technologies in the automotive sector.
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