Insurance Premium Tax: The Italian Tax Authorities’ new interpretation in the motor sector

Over the past few weeks, several insurance companies operating in the Italian market have been facing a new wave of tax questionnaires and audits on how to apply the Insurance Premium Tax (IPT) to driver accident (infortuni sul conducente) and roadside assistance (assistenza stradale) insurance guarantees.

These proceedings – largely coordinated at a national level – reflect a renewed interpretative approach by the Italian Tax Authorities (Guardia di Finanza or Agenzia delle Entrate – ITA). The ITA seems to be questioning the long-standing tax treatment adopted by the entire insurance industry for decades.

At the same time, rumours reported in the Italian financial press suggest that possible amendments to the IPT regime might be included in the 2026 Budget Law, potentially with retroactive effects, in particular with reference to driver accident (infortuni sul conducente) insurance guarantees.

Understanding both the rationale of the new tax assessments and the historical evolution of the IPT legislation is crucial in assessing the solidity of the insurance sector’s position and to anticipate potential legislative adjustments.

 

Italian Budget Law 2026: Possible amendments to the IPT regime

According to press leaks, the government is considering introducing a new law provision in the 2026 Italian Budget Law concerning the applicability of the 12.5% IPT rate to insurance guarantees “related to motor vehicle circulation,” including driver accident guarantees. It’s not clear whether this law provision will have retroactive effects, bearing in mind that at least ten years are still open for IPT tax assessments.

If confirmed, this intervention would be a substantial shift from the current framework, where these insurance guarantees are taxed at 2.5% (for driver accident cover) and 10% (for roadside assistance cover). Both rates are explicitly grounded in the long-standing interpretation of Law No. 1216 of 29 October 1961 (IPT Law), as progressively amended by subsequent legislation and clarified by ministerial guidance.

A legislative intervention aimed at imposing the 12.5% rate across all motor-related insurance guarantees would generate a significant financial impact for insurers and policyholders. But it would also risk contradicting the logic of the existing Italian tax framework, which is founded on a clear distinction between compulsory motor liability insurance and optional insurance coverages.

 

The Italian Tax Authorities’ potential interpretation

In parallel with these potential legislative developments, the ITA is sending insurance companies formal tax questionnaires starting from fiscal year 2015 requiring IPT-related information. The ITA is also requesting a memorandum regarding the tax and legal treatment adopted by the companies with reference to driver accident (infortuni sul conducente) and roadside assistance (assistenza stradale) insurance guarantees.

It seems that the ITA is evaluating if these insurance guarantees allegedly constitute “risks related to the circulation of vehicles,” a category that – according to this interpretation – may be assimilated to RC Auto regime under Article 1-bis, IPT Law. In other words, the ancillary nature of these covers vis-à-vis the compulsory RC Auto policy should entail their taxation at the same rate (12.5%), irrespective of whether they’re sold together or separately.

This potential interpretation would mark a significant departure from both administrative practice and industry consensus, given that the tax treatment was explicitly recognised by the Ministry of Finance through the Circular No. 301716 of 3 December 1983 and the Italian market has uniformly followed this approach. The ITA itself had never previously questioned it.

 

Preliminary remarks on the Italian Tax Authorities' interpretation

From a legal and systematic standpoint, the ITA’s position doesn’t seem to be supported by the relevant legislation, nor by the interpretative acts issued over the past six decades.

From a formal point of view, all these kinds of policies fall within different insurance branches (driver accident: Ramo 1 – Infortuni; RC Auto: Ramo 10 – Responsabilità civile autoveicoli terrestri; roadside assistance: Ramo 18 – Assistenza).

From a substantial point of view, Ministry of Finance Circular No. 301716/1983 expressly clarified that driver accident insurance fell under the 2% IPT rate (now 2.5%), while motor liability insurance was subject to 10% IPT rate (now 12.5%). The circular also identified which insurance guarantees could be considered “risks related to the circulation of vehicles” – such as legal expenses, driving license withdrawal or cleaning costs after an accident – none of which are remotely comparable to driver accident or roadside assistance guarantees.

In a nutshell, both the law and the administrative guidance have consistently upheld a dual regime:

• Driver accident and roadside assistance covers are distinct and separately taxable.
• Only those risks directly connected to the liability of the driver fall under the RC Auto rate (Circular No. 301716/1983 expressly pointed out those kind of risks).

Unless and until the legislature expressly amends the law, the application of the 2.5% and 10% IPT rates to these insurance guarantees should be regarded as fully compliant with both the letter and the spirit of the applicable rules. Any attempt to requalify them as “related risks” to RC Auto – whether through tax audits or retroactive interpretation – would lack any legal foundation, generating unnecessary disputes, uncertainty and costs across the insurance market.

Even assuming that the ITA interpretation will be carried forward, administrative penalties should be excluded, by applying art. 8, Legislative Decree n. 546/1992 and art. 6, Legislative Decree n. 472/1997, in light of the objective conditions of uncertainty affecting these provisions.

If the legislator attempts to introduce an “authentic interpretation” of the IPT regime – retroactively extending the 12.5% rate to driver accident and roadside assistance insurance guarantees – it would raise serious constitutional concerns.

Ultimately, a transparent and forward-looking dialogue between the government, the insurance industry, IVASS and ANIA would be the most effective way to modernise the IPT framework without compromising legal certainty or undermining long-established market practices.