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In these days of austerity in Western Europe a worrying, though
not surprising, trend is the imposition of taxes on business
aircraft. In our last Aviation Bulletin we reported on the proposed
extension of UK Air Passenger Duty (APD) to business aviation, and
in this Bulletin we report on the new Italian tax known as
"Salva Italia".
The Salva Italia tax came into force on 2 May 2012. The tax
applies principally to Italian–registered private
aircraft and foreign-registered aircraft at rates up to
€7.55 per kg of MTOW (this highest rate applying to
aircraft with an MTOW over 10,000kgs).
With regard to Italian-registered aircraft, for private aircraft
the tax will be charged to the person indicated as the owner, the
buyer under a conditional sale agreement or the lessee. The tax is
to be paid at the moment of renewal of the certificate of
airworthiness of the aircraft. If the relevant airworthiness
certificate is in force at the time the law comes into effect, the
amount is due within 90 days from its coming into effect and its
amount is pro-rated to the remaining months of validity of the
certificate during the year 2012.
With regard to non-Italian registered aircraft, the tax applies
to such aircraft which spend more than 45 consecutive days in
Italy. This is a considerable improvement from the original
proposed 48 hours and means that the tax can be avoided by the
simple expedient of moving a foreign registered aircraft outside
Italy at least once every 45 days. Non-Italian registered aircraft
having spent more than 45 days on Italian territory are subject to
the tax on a pro-rata monthly basis, ie, 1/12 of the annual rate
for each month spent in Italy in excess of the 45 days tax
exemption period. The tax must be paid before leaving Italian
territory.
A major exemption relates to non-scheduled commercial flights,
so the tax only relates to private flights. As a consequence of
this non-applicability to non-scheduled commercial flights, and
possibly as a consequence of the extension of the relevant period
from 48 hours to 45 days with concomitant reduction in the tax
yield, a passenger tax on chartered flights (referred to as
"aero-taxis") has also been introduced by the Italian
legislature. The tax is €100 per passenger for flights of
less than 1,500kms and €200 per passenger for flights in
excess of 1,500kms. The aero-taxi tax is to be calculated per
"leg". The text of the law is not completely clear on the
meaning of this, but, by analogy with the words used in Regulation
261, the current wording is interpreted to mean that the amount is
due on departure or arrival or both in the case of a return
journey.
It has been well put that Salva Italia "must give regular
travellers to Italy a feeling of déjà vu mixed with
an impression of incoherence" (Giulia Mauri, Verhaegen
Walravens). This is because a similar luxury tax, the 2006 Soru
tax, was recently declared unconstitutional by the Italian
Constitutional Court. In the last Bulletin we discussed the
compatibility of UK APD with Article 15 of the Chicago Convention,
and similar questions must be raised in relation to the Salva
Italia. As our last Bulletin suggested, perhaps the time is overdue
to revisit the court precedents in respect of the UK APD and the
(subsequently abolished) Dutch Ticket Tax.
"Salva Italia" literally means "save" or
"rescue" Italy and the tax is part of a series of
measures introduced by the Italian Prime Minister Mario Monti to
reduce Italy's budget deficit. This is of course a laudable
aim, but the business aviation industry will query whether
potentially disregarding international aviation legislation is the
best means of achieving it. As well as being a consequence of the
debt crisis in Western Europe it is also part of an international
trend, with the Chinese government introducing a levy on airline
passengers early in 2012 of Rmb50 (for domestic routes) and Rmb90
(for international routes). No doubt there will be further similar
developments to report on in future Bulletins.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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