Portugal
Contributor: João Marques de Almeida
1. Will the relevant law require any sales, value added or other taxes to be payable on a domestic sale/purchase or transfer of title/interest of an aircraft?
The domestic transfer of an aircraft should originate the payment of Portuguese VAT.
a. If so, by whom, at what rate and are there any exemptions available?
Purchaser shall be liable for VAT at the general rate of 23%. A VAT exemption shall be applicable if the purchaser is an airline operating for reward chiefly on international routes.
2. Will the relevant law require any sales, value added or other taxes to be payable on an intra EU sale/purchase or transfer of title/interest of an aircraft?
The transfer of used aircraft should originate the payment of Portuguese VAT if the purchaser is a consumer or it does not have a valid EU VAT number. Otherwise, VAT will not be levied in Portugal, but it may be due in the country of the purchaser under the reverse charge mechanism.
The sale of new aircraft to another EU country is not subject to VAT in Portugal but VAT should in principle be levied in the country of destination.
a. If so, by whom, at what rate and are there any exemptions available?
Purchaser shall be liable for VAT at the general rate of 23%. A VAT exemption shall be applicable if the purchaser is an airline operating for reward chiefly on international routes.
3. Will the relevant law require any sales, value added or other taxes to be payable on a sale/purchase or transfer of title/interest of an aircraft in that jurisdiction if the purchaser is a foreign entity and will export the aircraft to another country?
The transfer of an aircraft for export to a non-EU country shall not be subject to VAT in Portugal as long as the aircraft is made available to the purchaser outside Portugal.
a. If so, by whom, at what rate and are there any exemptions available?
N/A
4. Will the relevant law require any export tax and/or customs duties to be payable on the export of an aircraft in the relevant jurisdiction?
No.
a. If so, by whom, at what rate and are there any exemptions available?
N/A
5. Will the relevant law require any import (value added) tax and/or customs duties to be payable on the import of an aircraft in the relevant jurisdiction?
The first import of an aircraft into the EU through Portugal will trigger Portuguese VAT.
a. If so, by whom, at what rate and are there any exemptions available?
By the purchaser/importer at the rate of 23%. No VAT shall be due if the purchaser/importer is an airline operating for reward chiefly on international routes.
6. Will the relevant law require any stamp duties or fees and/or documentary taxes to be payable upon the execution of any aircraft transaction documents in the relevant jurisdiction?
Only registration fees.
a. If so, by whom, at what rate and are there any exemptions available?
By the purchaser and with no exemptions. Registration fees are currently of 72.33 EUR.
7. Will the relevant law require any taxes or duties on registering the aircraft?
Only registration fees of 72.33 EUR.
8. Are there any luxury taxes payable in your jurisdiction in relation to aircraft?
No.
9. Will the relevant law require any income, withholding or other taxes to be payable in respect of payments made by an aircraft lessee to a lessor?
VAT and Corporate Income Tax should be due.
a. If so, by whom, at what rate and are there any exemptions available?
VAT is levied at the rate of 23% and is borne by the lessee. However, a VAT exemption is available if the lessee is an airline operating for reward chiefly on international routes.
Corporate Income Tax for a non-Portuguese lessor should be levied under a withholding tax at the flat rate of 25% unless a specific double taxation agreement is applicable.
10. What are the tax implications for operation and use of commercial aircraft?
A VAT exemption is available as long as the operator is an airline operating for reward chiefly on international routes. Fuel tax is also exempt.
11. What are the tax implications for operation and use of corporate and/or private aircraft?
No VAT or fuel tax exemption available.
12. Will the relevant law require any taxes to be payable on aircraft loan repayments (income tax and interest)?
Corporate Income Tax should be due over the interest component of the loan repayments.
a. If so, by whom, at what rate and are there any exemptions available?
Payable by the lessor. Corporate Income Tax for a non-Portuguese lessor should be levied under a withholding tax at the flat rate of 25% unless a specific double taxation agreement is applicable.
13. Does the relevant law have any environmental or carbon emission taxes or schemes?
The European Union emissions trading system (EU ETS) (Directive 2003/87/EC of the European Parliament and of the Council of 13 October 2003) was implemented in Portugal by Decree-Law nr. 93/2010 of 27/07.
14. Will the relevant law require any cargo, airport (departure) or passenger taxes?
Yes, including air navigation.
15. Will the relevant law require any aviation fuel taxes?
An exemption is applicable to commercial aviation.
16. Are there any other taxes specific to aircraft (not already mentioned above) in the relevant jurisdiction?
No.