On May 2, 2022, Decree Law No. 38 of May 2, 2022 (D.L. No. 38) Concerning Urgent Measures Regarding Excise Taxes and Value-Added Tax (VAT) on Fuels entered into effect in Italy.
Reduction of Excise Taxes
The new legislation aims at mitigating the negative effects that the recent exceptional increase in the prices of energy products due to the Russian invasion of Ukraine have had on the Italian economy. (D.L. No. 38, art. 1(1).) In particular, the urgent measures — which are valid between May 3 and July 8, 2022 — seek to reduce the rates of excise duty on gasoline, diesel, and liquefied petroleum gas (LPG) used as fuel. (D.L. No. 38, art. 1(1)(a).) The rate of excise duty on natural gas used for transport is eliminated, and the VAT rate applicable to natural gas used for transport is set at 5%. (D.L. No. 38, art. 1(1)(a)(4) & 1(1)(b).)
The excise duty on the following products is lowered, as specified: (a) on gasoline, from 728.40 euros to 478.40 euros (€) (about US$778 to $511) per thousand liters; (b) on fuel oil from gas or diesel, from €617.40 to €367.40 (about US$659 to $392) per thousand liters; and (c) on LPG used as fuel, from €267,77 to €182.61 (about US$286 to $194) per thousand kilograms. (D.L. No. 38, art. 1(1)(a)(1)–(3).)
In addition, the rate of excise duty on commercial diesel used as fuel is also reduced for the period from May 3, 2022, to July 8, 2022. (D.L. No. 38, art. 1(2).)
Measures to Prevent Speculation on Gas Prices
The government and consumers’ associations have been particularly concerned about the speculative raising of prices at gas stations as a result of the Russian invasion of Ukraine. In this context, and to prevent the risk of speculative maneuvers arising from the reduction of the aforementioned excise duty rates, the new legislation reinforces the powers of the Guarantor for the Surveillance of Prices and strengthens the operational support of the Financial Police (Guardia di Finanza) to monitor price trends — particularly those relating to the sale to the public of energy products conducted within the entire commercial distribution chain — and ensure that the reduction of the VAT rate contemplated in the new legislation is observed in such distribution chains. (D.L. No. 38, art. 1(5)–(6).)
Government Allocations to Finance the New Tax MeasuresTo finance these urgent measures, the legislation appropriates about €2.33 million (about US$2.49 million) for the year 2022 and €107.25 million (about US$114 million) for the year 2024. (D.L. No. 38, art. 1(10).)