Tax
8. Are there any luxury taxes payable in your jurisdiction in relation to aircraft?
Austria
No.
Brazil
No.
Colombia
Aircraft within the legal system are not considered as luxury goods. Therefore, all tax treatment given to aircraft will not be special, as they are not considered luxury good inside the Colombian tax regulation.
Czech Republic
No luxury taxes are payable in the Czech Republic at the moment.
Germany
There are no luxury taxes payable in Germany in relation to aircraft.
Greece
Pursuant to article 44 par. 1 (a) of Law 4111/2013 a special annual tax, called “luxurious living tax”, is imposed on natural persons who are subject to income tax in Greece, calculated on the amount of the (annual) “objective income” deemed to arise on the basis of ownership or possession (among others) of aircraft, as such objective income is (by law) calculated, depending on their technical characteristics (basically horse power); currently the rate is 13% on the respective deemed/objective income.
Persons subject to income tax in Greece (and thus subject to the above “luxurious living tax”) are (a) tax residents of Greece, as well as (b) persons that (without being resident in Greece) earn income from Greek sources.
Israel
No, save for the imposition of purchase tax on the purchase of an aircraft solely for private use and not, for the avoidance of doubt, for agricultural or fire-fighting purposes.
Italy
Yes, in Italy there are two (2) different “luxury” taxes involving the aviation sector. Namely:
– Tax on aerotaxi passengers
This tax is due by passengers of aerotaxi flights for each single route departing from, or arriving to, any Italian airport. The tax is calculated as follows: Euro 10 per passenger for flights within 100 km; Euro 100 per passenger for flights over 100 Km and within 1.500 km; Euro 200 per passenger for flights over 1.500 km.
For calculation purposes, the flight distance between departure and arrival points shall not consider any technical stop-over.
The tax is expressed to be due on “aerotaxi flights”, which under an implementing directive of the Italian Tax Authority are defined as those flights operated for the transport of passengers pursuant to a charter agreement entered into for the entire capacity of the aircraft.
– Tax on private aircraft
This tax is due by aircraft owners, owners under title reservation agreement, financial lessees and usufructuaries, provided that a tax exemption is granted to aircraft owned by – or under the operational control of – licensed carriers of scheduled or non-scheduled flights.
The yearly tax amount is calculated on the basis of the aircraft maximum take-off weight, ranging from Euro 0,75 per Kg for aircraft of 1.000 kg (or less) to Euro 7,60 per kg for aircraft over 10.000 Kg.
For foreign registered aircraft, the tax becomes due if the aircraft remains in the Italian territory for more than six (6) months (consecutive or not) over a period of twelve (12) months.
Kenya
Not applicable.
Mexico
No.
Nigeria
Nigerian law makes no provision for the payment of luxury taxes in relation to an aircraft.
Norway
As a starting point, no luxury taxes will be payable.
Panama
There are no luxury taxes payable in the Republic of Panama.
Peru
In our legislation, there is no luxury tax for aircraft.
Portugal
No.
Puerto Rico
No. There is no state legislation governing this matter in Puerto Rico.
Romania
In accordance with Romanian Tax Law are exempt from excise duty products supplied on board an aircraft or a ship during an air or sea voyage to a third territory or to a third country shall.
Furthermore, art. 399 para. 1 let. a) of Romanian Fiscal Code provides that shall be exempt from the payment of excise duties energy products delivered for use as a fuel for aviation, other than private aviation tourism. Private tourist aviation is understood to be the use of an aircraft by its owner or by the natural or legal person holding it for rental or other purposes, for purposes other than commercial and, in particular, other than transportation of persons or goods or services provided for free or for the needs of public authorities.
South Africa
- No
Spain
N/A
Switzerland
No, there are none.
United States (Miami)
With respect to income tax, there are no added income tax requirements by virtue of an aircraft lessor/lessee relationship. Accordingly, traditional income tax law applies. That is, if the lessor is a US taxpayer, such US lessor will be subject to Federal Income Tax. Non-residents are generally, with some exceptions, subject to tax on two categories of U.S. Source income: (i) Investment/passive income: U.S. Source income not connected to a U.S. trade or business (FDAP); and (ii) business income: income effectively connected with U.S. trade or business (ECI).
With respect to withholding, possible 30% withholding tax on payments made to non-US taxpayers if characterized as dividends or branch profits. Withholding tax may be reduced or eliminated based on applicable tax treaties.
With respect to other taxes, it generally depends upon the law of the State within the United States which may be applicable. Often the “Use Tax” referenced in number 10 below may be applicable. In Florida, for example, a lessor may register as an “Aircraft Dealer” authorized to collect and remit tax and may “use” the aircraft subject to a 1% Use Tax for each month the aircraft is in Florida. Notwithstanding the payment by the dealer of tax computed on 1% of the value of any aircraft, if the aircraft is leased or rented, the dealer must collect from the lesser and remit a 6% plus tax that is due on the lease or rental of the aircraft.