The Italian government has approved an amendment to the contentious tax on business aircraft that it made law on April 29. Now, foreign-registered aircraft operated privately will incur the tax only if they stay for 45 consecutive days, rather than the 48-hour threshold in effect until now. The amendment, which is expected to be endorsed by the Italian parliament, would also reduce the rate of the tax by 50 percent.
Brazilian tax authorities, police and aviation officials seized nine business jets late last month and have targeted 13 more. Allegedly, Brazilians own and use the jets but registered them overseas to avoid state and federal taxes of nearly 35 percent. The value of the jets, $275 million, is almost equal to the country’s total customs seizures last year. Foreign aircraft can legally remain in Brazil for up to 60 days annually without paying import duties.
The recently approved highway reauthorization bill was passed without repeal of the fuel fraud tax, according to the National Air Transportation Association (NATA). The tax was part of the 2005 highway bill, an effort to prevent truckers from avoiding highway taxes by filling up with jet fuel. NATA plans to continue its efforts to repeal the tax, according to Eric Byer, v-p of government and industry affairs.
With aircraft owners facing continuing headaches over importing aircraft into the European Union, offshore registrations are increasingly being considered as a more flexible option. At the same time, lawyers have been scrambling to develop elegant solutions to avoid at least immediate liability for punitive rates of value added tax through deferral schemes.
More than 100 business aircraft, with a nominal overall value of more than $1 billion, are currently covered under the FinServe European Business Aviation Placement (F-EBAP) “privileged” insurance program sold by independent broker FinServe Aviation Insurance (Stand 383), which is celebrating its 25th anniversary.
With financing for business aircraft still far from easy to secure, ExecuJet Aviation has stepped up its efforts to help get more people airborne through its SimplyFly Finance program. The plan is to offer fast-access, simplified nonrecourse financing in the shape of five-year loans or leases for up to 70 percent of the value of an aircraft worth at least $20 million and no more than five years old. An initial fund of $400 million provided by ExecuJet’s main shareholder Dermot Desmond is available to support the program.
The European Business Aviation Association (EBAA) is tackling the headaches facing those trying to secure funding for new and preowned aircraft with the recent formation of a finance and leasing working group to report to its associate members advisory committee (AMAC). The group will be chaired by Aoife O’Sullivan, a partner with London-based aviation law firm Gates and Partners.
Hawker Beechcraft announced at 3:30 p.m. EST today that it has reached an agreement with a “significant number” of its senior secured lenders and senior bondholders on the terms of a financial restructuring plan that will “strengthen the company for the future and eliminate approximately $2.5 billion in debt and approximately $125 million of annual cash interest expense.” To move this process forward, the Wichita-based OEM and certain of its subsidiaries today filed voluntary petitions under the Chapter 11 bankruptcy code.
Italy’s parliament passed proposed changes to the aircraft luxury tax today, according to NBAA.