By Julie Martin, MNE Tax
Finance ministers from 9 European nations on November 7 called on the European Commission to advance a proposal for an EU-wide tax on aviation transport or “similar policies” to compensate for the industry’s negative affect on the environment and its current low level of taxation.
In a statement, EU finance ministers from the Netherlands, Luxembourg, Denmark, Sweeden, Belgium, Germany, France, Italy, and Bulgaria, observed that aviation creates about 2.5% of global CO2-emissions and causes negative externalities, such as noise and air pollution. Yet, the industry is exempt from taxes imposed on other means of transportation.
There are no excise duties on aviation, no VAT is levied on international flights, and there is no coordinated ticket tax, the ministers observed. Also, economic instruments to curb greenhouse gas emissions can be strengthened in this sector, they said.
“CO2-emissions and negative externalities are on average not sufficiently covered in the price of international airplane tickets,” said the ministers.
Any European Commission proposal for a tax or other measure should take into consideration existing effective national systems and policies; the competitiveness of the sectors concerned; and the geographical position and the development of the transport infrastructure in member states, the ministers said.
Julie Martin
Julie Martin is the founder of MNE Tax. She edits the publication and regularly contributes articles on new developments in cross-border business taxation.
Julie has worked as a tax journalist and editor for more than 13 years. Prior to that, she worked as an in-house tax attorney in New York. She also holds an LLM in taxation from New York University School of Law.
Julie can be reached at [email protected].
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