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  CMS Belgium | Ground Control - Your Aviation Update | June 2019  
  European Commission study on taxes in the field of aviation and their impact

Taxation in the air transport sector has been a sensitive issue for many years, especially recently because of the climate change debate. According to the actors within this sector, air transport is subject to too many taxes, such as departure taxes or solidarity levies, which affect its competitiveness and create unfair competition that benefits airports and airlines in more favourable fiscal regimes. Others point out that aviation fuel is generally exempt from excise duty and that VAT is often not charged on tickets.

While inaction at a European level is criticized, the European Union has limited room to manoeuvre, as EU fiscal policy regulations require a unanimous decision by the European Council.

In this context, the European Commission ordered a study of taxes imposed in the EU and selected non-EU countries. The study contains an inventory of taxes in the air transport sector and an assessment of their economic and environmental impacts.

The study (by CE Delfs) concluded that, in general, new taxes or an increase in existing taxes would have a negative impact on the air transport sector in terms of direct employment or direct value added, but at the level of each Member State the impact on overall employment, fiscal revenue and GDP would be negligible. New or increased taxes would lead to a reduction in passengers and flights and therefore limit the negative impacts on the environment. However, these straightforward conclusions must be tempered by the differences between the national taxation regimes and the various priorities given to the sector by Member States.

The study, published this month, can be viewed via the following link.

Any questions?
Contact us: 

Annabelle Lepièce

Partner | CMS Brussels
T +32 2 743 69 34


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