Taxation of Motor Insurance Policies: Italy

Edit Buliczka
September 26, 2024

This blog was last updated on September 26, 2024

In Italy, the insurance premium tax (IPT) code (which is being revised as of the date of this blog’s publication) and various other laws and regulations include provisions for taxes/contributions on motor hull and motor liability insurance policies.

This article covers all you need to know about this specific indirect tax in the country.

As with our dedicated overviews of the taxation of motor insurance policies in Spain, Norway and Austria, this blog will focus on the specifics in Italy. We also have a blog covering the taxation of motor insurance policies across Europe.

Which taxes are payable concerning motor insurance policies in Italy?

In Italy, there are four types of charges payable on motor insurance policies:

  • Insurance Premium Tax (IPT/RCA)
  • Contributions to the Solidarity for Victims of Extorsion and Usury (CONSAP)
  • Contributions to the Emergency Fund (EMER)
  • Contributions to the Road Accident Victims` Fund (RAVF)

How are the taxes calculated for motor insurance policies in Italy?

Whilst motor insurance policies can include various coverages as add-ons, this blog’s main focus is on motor hull and motor liability.

  1. Motor Hull (Class 3)

Calculating taxes on land vehicles, i.e., motor hulls (Class 3), is simple. There is only IPT at 12.5% and CONSAP at 1%.

The taxable premium is the basis of these taxes. Both taxes are declared in the annual IPT return and payable monthly.

  1. Motor Liability (Class 10)

The taxation of insurance policies against civil liability arising from the circulation of motor vehicles is more complex.

The IPT rate (so called Responsabilità Civile Auto or RCA tax) is determined on a provincial level. Legislative Decree 6 May 2011, No. 68 quotes that the rate of the RCA tax is equal to 12.5%. However, this can be increased or decreased by the province or metropolitan city by a maximum of 3.5%. That is why RCA tax rates are sometimes referred to as a tax with a rate ranging from 9-16%.

In Italy, there are 20 regions, each with one or more autonomous provinces or cities. To complicate matters further, the province or city can modify the tax rates within the tax year.

CONSAP does not apply on motor liability policies, however EMER is at a rate of 10.5% with an additional 2.5% required for RAVF.

RCA and EMER are declared in the annual IPT return, and payments are due monthly.

Although RAVF is also declared annually, the declaration process differs, and there is also a prepayment obligation. The actual amount of RAVF depends on the management fee set annually by the Italian insurance supervisory body (IVASS) – the percentage of which is published during November for the next year.

As previously stated, IPT/RCA regulations are undergoing major renewal (during 2024). The legislation governing the tax provisions on private insurance and life annuities (Law 29 October 1961, No. 1216) is part of the Italian Government`s tax reform initiatives.

According to the available draft legislation, the IPT law will be divided into three parts:

  • Minor taxes (technical aspects of this tax)
  • Assessment rules (procedure rules)
  • Penalty regulations

The government extended the deadline for enactment of the new regulation to the end of 2025.

What vehicles are exempt from tax in Italy?

There are not many exemptions available for IPT/RCA tax, nor for CONSAP, EMER and RAVF. However, cars registered in Italy to NATO Allied Force benefit from an exemption from IPT/RCA.

If you still have questions about the taxation of motor insurance policies or IPT in Italy, speak to our experts.

Sign up for Email Updates

Stay up to date with the latest tax and compliance updates that may impact your business.

Author

Edit Buliczka

Edit is a senior regulatory counsel. She joined Sovos in January 2016 and has extensive IPT knowledge and experience. Her role ensures the IPT teams and systems at Sovos are always updated with legislative changes. She is a Hungarian registered tax expert and chartered accountant and has worked for companies in Hungary including Deloitte and KPMG and as an indirect tax manager she worked for AIG in Budapest. She graduated with an economist degree from Budapest Business School, faculty of finance and accountancy and also she has a postgraduate diploma from ELTE Legal University in Budapest.
Share this post

future of tax and compliance
North America
June 6, 2024
Observations and Predictions: The Future of Tax and Compliance

This blog was last updated on June 6, 2024 When I became the CEO of Sovos one year ago, I knew that I was stepping into an innovative company in an industry primed for a seismic transformation. However, even with this knowledge in place, I must admit that the speed and scope of change over […]

moneygram litigation settlement
North America Unclaimed Property
October 10, 2024
The Impact of the MoneyGram Litigation Settlement on Unclaimed Property Law

This blog was last updated on October 10, 2024 By Freda Pepper, General Counsel, Unclaimed Property The Supreme Court of the United States rarely addresses unclaimed property law, which made its ruling against Delaware in the 2023 MoneyGram litigation particularly noteworthy. The case focused on the escheatment of MoneyGram checks and similar written instruments. Following […]

unclaimed property compliance
North America Unclaimed Property
September 25, 2024
The SMB’s Guide to Unclaimed Property Compliance

This blog was last updated on October 10, 2024 Unclaimed property compliance is often overlooked by small businesses, with many mistakenly thinking it only applies to large corporations. But this misconception can lead to serious financial and legal trouble. All businesses, no matter their size, must follow the same state regulations when it comes to […]

Minnesota Retail Delivery Fee
North America Sales & Use Tax
September 23, 2024
Understanding the Minnesota Retail Delivery Fee

This blog was last updated on September 24, 2024 If you are fulfilling a Minnesota Retail Delivery Fee, you should be double checking that you are considering all possible jurisdictionally-imposed fees due on the transaction. Depending on where you are delivering, you may need to collect a fee just for making the retail delivery itself! […]

What are Continuous Transaction Controls (CTCs)?
E-Invoicing Compliance North America VAT & Fiscal Reporting
September 20, 2024
Continuous Transaction Controls (CTC): The Future of Compliance

This blog was last updated on September 20, 2024 One key development shaping the future of tax compliance is the rise of Continuous Transaction Controls (CTCs). CTCs represent a shift in how governments monitor and enforce tax compliance, requiring businesses to submit transaction data to tax authority systems on an ongoing basis.  The models differ […]

need for clean core
North America Tax Compliance
September 18, 2024
SAP: Keep the Core Clean for Tax and Compliance Part II

This blog was last updated on September 19, 2024 In the first blog in our series, we introduced SAP Clean Core concept and how much is being made about its impact on business, specifically the ability to customize an ERP to meet operational needs. For part two, I’d like to address how businesses can use […]