The Italian TARI garbage tax: life, death and miracles

  •   July 15th, 2014
  •   Category: Regulations
  •   Posted by: Ecodyger

Waste Tax, a jungle between continuous changes of name, methods and timing of application

Who hasn’t tried in the last three years to understand what and how much you should pay in Italy for waste, raise your hand? TARSU, TARES, TIA, TARI, IUC, etc etc … A constant media bombardment of names, dates, methods of calculation, increases, extensions and so on and so forth. The Ministry for the Environment and Protection of Land and Sea, has recently admitted that the constant changes and adjustments made in the field by the various governments that have taken place in the last three years in the Country have made it even more difficult to implement and collect the same by all municipalities, which are responsible for the practical management of the same. In this chaos of information and regulatory environment, almost all municipalities have had to postpone the application of the tax itself and use consultants and professionals to interpret and adapt to their own situation the latest legislation.

What do we have to pay today?

Without prejudice to what’s new now, today, in July 2014, Italy will pay the IUC introduced by the Law of Stability 2014. This new Service Tax, rather than a true tax, is a kind of container that encompasses three distinct contributions: IMU, Tasi and Tari. The IUC is based, as enshrined in the law establishing, taxation on two assumptions:

1. Imu: consisting of the possession of property and connected to their nature and value;

2. Tasi: connected to the provision and use of municipal services;

3. Tari: related to waste management.

What is IMU?

IMU acronym stands for council tax. Actually, two other taxes fall under this: the ownership tax, affecting the possession of property, and the secondary council tax, which replaced in 2014 some existing forms of taxation at the municipal level such as the fee for the occupation of public spaces and public areas, the fee for occupation of public spaces and public areas, the municipal advertising tax and duties on public billboards, the fee for permission for installation of advertising media.

What is TASI?

Tasi is an acronym for Tax on Indivisible Services, the new municipal tax established by the Financial Stability Act of 2014. It covers municipal services aimed at the general public, such as road maintenance or municipal lighting. The big news of the Tasi is that the taxpayer who pays is not only the owner of the buildings in any capacity, including the main house, the uncovered areas and building areas, whatever their use, but also the tenant. The law provides that in the event that the housing unit is occupied by a person other than the holder of the right real estate unit, the latter and the occupant is the holder of an independent tax obligation. The occupant will pay only part of the total between 10% and 30% as determined by the City in the regulation of Tasi.

What is TARI and what does it replace?

Tari is an acronym for waste fee, the new municipal tax established by the Financial Stability Act of 2014. It basically takes the place of the old Tares, that was introduced by the new government by Decree-Law n. Decree 201 of 2011.

Tares was going to replace the Tia, Environmental Health Fee, established by Law n.22/97 Ronchi, which in turn had replaced the Tarsu, the tax on municipal solid waste.

Municipalities had to add to it a bonus for indivisible services like public lighting, etc. The new tax introduced at last a single waste management. Tares was similar to Tia and not to Tarsu, which was a tax and therefore not subject to VAT as a fee for the simple reason that a tax did not apply to another. Tares had to be paid by the citizens for the activity of waste management considered as a whole, and namely:

  • collection, transport, disposal and recover of urban waste (differentiated and undifferentiated);
  • road cleaning and general urban areas clearing, collection of leaves and green discards, etc;
  • disposal or recovery of waste caused by the activities referred to in the preceding paragraph;
  • Control and management of the operations described above;
  • Relationship with the user (customer service desk, call center, etc.) and administrative costs of collection, investigation and litigation.

The amounts of the tax, the implementing rules and specifications for the management of services were established by municipalities and appropriate regulations. Globally, the rate was supposed to be a guarantee of a more equitable relationship between the amount of waste produced and the amount paid by each user / client: it was estimated, in fact, not only based on the size of ‘property in which you live, but also in relation to the number of family members for household and based on the activity carried out by production users for non-domestic users. From here we understand the drastic increase of the tax for all those users who actually produced the largest quantities of organic waste, which management is very expensive and burdensome. Restaurants, hotels, supermarkets, campings, all of them saw the fee increase of the double or triple; also fruit and vegetable shops and clubs have registered increases of up to 500-600% of the tax

The tariff, when required by the regulations, could provide incentives to those who adopt good methods towards the environment. In this regard, we regret to note that very few municipalities have proven lack of virtuous thinking not encouraging and improving the collection service and reducing the tax in favor of those virtuous citizens who “not produce “or drastically reduce organic waste at source. For example, very few municipalities have recognized and given significant reductions for home composting.

At the conclusion of this long evolution of the waste tax, it is important to remember that at the end of 2013 less than 50% of Italian municipalities were able to switch from Tares to Tia regime, making it softer for all citizens and business users the transition to the regime of TARI today.

Who pays the TARI?

As mentioned, the Tari is payable by anyone who owns or holds title to any premises or outdoor areas whatever their use is, and that are likely to generate waste. In cases of multiple owners or holders, they are jointly and severally liable to the fulfillment of the only tax obligation.

In the case of local timeshares and integrated shopping centers, the entity that manages the common services is responsible for the payment of Tari due to the premises and uncovered areas of common use and for premises and open areas in the exclusive use of individual owners or holders, subject to these past other obligations or rights arising from the tax ratio on the premises and the areas under exclusive use.

Which surface is considered for the purposes of TARI?

For the purposes of Tari considering the areas declared or established for the purpose of previous waste taxes. In determining the area which qualifies for Tari, one does not take into account that part of it where they are formed, on an ongoing basis, prevalent hazardous waste, the disposal of which are required to provide at his own expense related manufacturers, provided that they demonstrate the ‘treatment occurred in accordance with local regulations.

When you need to pay TARI?

The Tari is calculated by common membership on an annual basis and payment is divided into two semesters: 1 January – 30 June and 1 July – 31 December. It also permitted the payment in a lump sum by June 16 of each year.

How do you calculate the TARI?

The Tari, trying to keep things simple, will be paid according to the square meters of the dwelling and the number of occupants, according to the say “the polluter pays”.

The open areas, parking lots, yards, or gardens, will not be taxed. The amount of fee was left to the discretion of municipalities and, needless to say, basically municipalities are applying the maximum rates allowed. If instead we want to get a little more in detail and distinguish by type of household and non-household, we say that the Tari is payable by those who in any way occupy or lead any localexisting in the municipality. It is important to note that employment is defined as the availability of local materials and even some areas.

For both types of users, the tariff on waste consists in reality of a fixed portion and a variable portion, in addition to the provincial tax. For the calculation of the shares, it must be taken into account the busy square meters of the property and the type of activity that takes place within the same in the case of non-domestic users.

  • The fixed fee shall be determined taking into account the components of the cost of urban hygiene services (investment and amortization, sweeping roads, etc..)
  • The variable fee covers the cost of the waste integrated service (collection, transport, treatment, recycling, disposal) and it is related to the amount of non-recoverable waste collected from each user.

Also, it is important to note that the fare calculation also takes into account the total number of inhabitants of the town of residence; we start from municipalities with fewer than 5,000 inhabitants to the cities with more than 1.5 million inhabitants.

How much does a family pay?

The waste rate for households is calculated on the basis of: square meters of the property including box / parking, basements, attics, excluding uncovered areas (balconies, terraces, gardens); number of people in the family who live in the building. The rate is calculated on an annual basis and payment is divided into two semesters, and the document of payment of the fee includes: a fixed fee, linked to the costs incurred for the provision of the service; a variable portion linked to the amount of waste generated and disposed of.

Two examples for a family of 4 who lives in an apartment of 80 square meters:

  • Trento: Total fee: € 168.68 + 10% VAT = € 185.55. Divided into: fixed fee: € 1.4335 x 80 square meters = € 114.68; variable portion (minimum volume required): € 0.0900 x 600 liters = € 54.00.
  • Rome: Total fee: € 303.40 divided into two half-yearly installments and consists of the following items: Rate: € 288.95; Contribution to Provincial € 14.45. The rate is calculated on the basis of a fixed fee of € 148.87 and a variable portion of € 140.08.

How much does an office or a company pay?

Rate Waste for offices and companies is calculated on the basis of: square meters of the room or area; category of membership or activity carried out in the local area, see table. The document of the fee includes: a fixed fee, linked to the costs incurred for the provision of the service; plus a variable portion linked to the amount of waste generated and disposed of. As already mentioned above, in this case, the rate is calculated on an annual basis and payment is divided into two semesters.

For these users, the calculation, as said, also depends on the type of user and depending on this type is used a multiplier that goes from 1 up to 6. The maximum multiplier, easy to understand, is applied to utilities such as those considered able to produce the most high quantity of organic waste. Why do you charge more for this type of waste? Because in the chain of waste management, the workforce is one that represents the higher costs and charges for its collection (at least once a week if not two in the summer). So bars, restaurants, shops, fruit and vegetables, fish, flowers and plants, pizza slices, also takeaway, hypermarkets of mixed genres, schools and market stall selling food, discos and nightclubs, are the most penalized.

An example: Rome, assets belonging to the category which includes restaurants, area of ​​450sqm: Total fee: € 18,992.50. Of which fixed proportion (46.74%) and € 8,844.38 variable portion (53.26%) € 10,078.12.

Keep in mind that these figures refer to 2011 under the TIA (Source: Minutes of the resolutions of the Capitol in July 2012), then in 2014, the same user, switching to TARI, should have, a further increase conceivable around 200%.

For all municipalities here where there was still a system of TARSU,  the transition to TARI, as suggested by Confcommercio, will lead to an even more drastic increase equal to 480%.

Does TARI provide any discounts / incentives for those adopting virtuous behavior towards the environment?

Being the TARI mutated from TARES, even in this regard, we regret to emphasize the fact that there are very few municipalities which are proving to be virtuous, providing very little or no fee reductions where there are households or commercial showing a drastic reduction at source the production of all those wastes whose management is increasingly costly and burdensome for municipalities themselves, first and foremost among all organic waste.

In this regard, many European countries have already aligned with the European Directive 2008/98 and with the Waste Hierarchy openly to encourage the most of every initiative of prevention and reduction of waste at source, avoiding their traditional entry in the chain of collection, transport, transfer and treatment / disposal. We will discuss in more detail this important and fundamental topic in the next post of our Blog.

Ecodyger allows to reduce the 90% of the volume and weight of the organic waste. Moreover, the residue can be used in many ways, including as compost. Ecodyger is one of those technologies that align perfectly with the European Directive 2008/98 by imposing drastic reduction of waste production.

A question for you:

What do you do to try to reduce your waste?