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Exchanging your foreign driving licence
Information from the Italian Ministry of Transport (http://www.mit.gov.it/mit/site.php?p=cm&o=vd&id=308, in Italian only)

Driving licences issued in the countries listed below can be exchanged for an Italian licence (last update: Dec.2009):

Albania (until 15th August 2014) 
Algeria  
Argentina  
Austria 
Belgium  
Bulgaria 
Croatia
Cyprus
Czech Republic
Denmark
El Salvador (until 19th September 2014)
Estonia  
Finland 
France 
Germany 
Great Britain
Greece 
Hungary
Iceland
Ireland
Japan  
Latvia
Lebanon 
Liechtenstein 
Lithuania 
Luxembourg
Macedonia
Malta
Moldova
Morocco
Netherlands
Norway
Philippines
Poland
Portugal
Principality of Monaco
Republic of Korea (South Korea)
Romania 
San Marino 
Slovak Republic 
Slovenia 
Spain 
Sweden
Switzerland
Taiwan
Tunisia
Turkey
Uruguay (until 12th December 2014)

Driving licences issued in the countries listed below can be exchanged for an Italian licence only for certain categories of citizens:

Canada: Diplomatic and consular personnel
Chile:  Diplomats and their relatives
United States:  Diplomatic and consular personnel and their relatives
Zambia:  Citizens on government missions and their relatives 

Rules for exchange

Non-EU driving licences
Foreigners from the countries listed above holding a non-EU driving licence can drive in Italy for a maximum of 1 year from acquiring residence in Italy, after which they must exchange their driving licence for an Italian one.

EU Driving Licences
The holder of a driving licence issued by one of the EU member States has no obligation to exchange his/her driving licence for an Italian one (even after 1 year from becoming an Italian resident). In this case the foreign driving licence remains subject to Italian law as concerns renewal periods and penalties.
 
Nevertheless it is recommended to apply for either the exchange or recognition of the EU driving licence to enable the Italian authorities to deal with renewal or duplicate procedures.

When applying for the exchange, you must surrender your foreign licence that will be replaced by the Italian one.
The application must be submitted within the period of validity of the foreign licence to the competent civil motorization office, producing the following documents:

• TT 2112 form
• Payment of € 9.00 into postal current account No.9001 and € 29.24 into postal current account No.4028 (pre-printed payment slips available at post offices and motorization offices)
• Original foreign driving licence and a front/back photocopy of the same
• Medical certificate, with revenue stamp and photograph, issued by an authorized doctor, and photocopy of the same
• 2  photographs, one of which must be authenticated.

Foreign licences issued by non-EU countries need to be accompanied by a translation with revenue stamp. The translation must be certified by the diplomatic representative of the country having issued the driving licence as being a true and faithful rendition of the original document. The certified translation must be validated by the competent "Prefettura" offices.

Rules for recognition
In this case, you keep your foreign driving licence. The relevant data are entered by the Italian authority in the national driving licence holders' database and a sticker is stuck on your original licence.
The application must be submitted to the competent civil motorization office, producing the following documents:

• TT 746 form
• Payment of € 9.00 into postal current account No.9001 and € 14.62 into postal current account No.4028 (pre-printed payment slips available at post offices and motorization offices)
• Original foreign driving licence and a front/back photocopy of the same
• "Declaration in lieu of certification" of residence in Italy
• Medical certificate, with revenue stamp and photograph, issued by an authorized doctor (this document is only required if - according to Italian regulations- the foreign driving licence has expired).