Italy’s parliament this week approved plans for a new tax on business aircraft, but details of how the legislation will work in practice are not anticipated until later next month. However, it is expected that tariffs could reach about $385,000 for larger business jets that spend more than 48 consecutive hours in the country. The tax will apply only to privately owned aircraft and will exclude those operated under commercial air operator certificates, as well as aircraft operated by governments and for purposes such as emergency medical services.
Value added tax
Taxes. I would like to pay fewer taxes, or none at all, but I accept why societies need them. I know some folks think we should do away with taxes altogether, but I can’t see how that could work. Like death, taxes are inevitable. On that cheery note, there is one tax I believe the aviation community needs to keep and support, if for no reason other than to avoid its alternative. The tax is the one on aviation fuel; its alternative is user fees.
After four highly successful years Brian Johnson, the man behind the Isle of Man Aircraft Registry and the island’s first Director of Civil Aviation, leaves on August 26 to pursue a new challenge (the Swaziland registry, according to some reports).
Imports of business aircraft into the UK have ground to a halt since tax authorities there scrapped its zero-VAT rating in January, according to Gama Aviation CEO Marwan Khalek. The change was forced on the UK by the European Commission with the intent of harmonizing VAT rules for aircraft sales, but the outcome has been a confusing muddle in which no one seems sure how VAT should now be applied.
Britain’s coalition government–composed of an exotic combination of Conservatives and Liberal Democrats–is at war with itself in more ways than one. But its recent proposals for a new tax on private aviation are a prime example of this conflict.
The recent removal of the loophole that allowed aircraft owners to import aircraft into the European Union (EU) via the UK at a zero rate of value-added tax has prospective buyers scrambling for fiscally friendly alternatives. One option is for private operators to find a way to get registered for tax purposes under a commercial aircraft operatorπs certificate, but this could subject the operator to unfavorable scrutiny by the authorities.
Universal Weather & Aviation (Stand C235) has doubled the number of countries covered by its UVAir service to provide fuel invoicing that is compliant with requirements for value added tax (VAT) due on aircraft fuel in Europe.
Operators of Bombardier jets are dismayed because they now have to pay state sales taxes on parts purchased through Bombardier’s Smart Parts program. Several operators who spoke to AIN on condition of anonymity said one of the primary reasons they participate in Smart Parts is to control and budget annual operating costs. “This adds a new dimension to overhead we didn’t budget for 2010,” one said.
Universal Weather & Aviation (Booth No. 7030) is launching a new service to guarantee that fuel purchases in Europe are made at the correct rate of value added tax (VAT). The complimentary service, which started on May 1, should overcome the headaches commonly associated with calculating which VAT rate should apply based on an aircraft operator’s status.
The UK government is considering a demand from the European Commission (EC) that it change its tax legislation to remove an exemption from value-added tax (VAT) for privately operated aircraft weighing more than 8,000 kilograms (17,636 pounds). On June 25, the EC “formally re-quested” through a so-called “reasoned opinion” that Britain bring its VAT rules in line with those of the 27-state European Union.