By Mélissa Capizzi and Maté Bajtay

Trailblazing the green frontier: EBAA's insights and tactics amidst the European Green Deal

The tax implications of the European Green Deal on Business aviation demand a flexible and adaptive approach from EBAA in calling for tax harmonisation among EU's Member States.

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Recently, EBAA and its Tax Working Group delved into key aspects of the European Green Deal, particularly focusing on the proposed energy tax alterations for aircraft and ships which could considerably affect Business aviation. This exploration unveiled several concerns and challenges the aviation sector might face in aligning with the EU’s rigorous climate objectives, underscoring the need for a dynamic and adaptable strategy by EBAA.

Navigating Communication Gaps

A major point of concern is the noticeable absence of recent updates from the Member States and the Commission regarding the proposed tax modifications. Considering the potential impact on the aviation industry, discussions revolve around how EBAA can set up efficient communication channels to stay informed and engage constructively in the decision-making process, by offering a clear and consistent viewpoint. A collective stance streamlines the process for the organization to advocate for its interests and concerns.

The EU Tax Maze

The intricate nature of decision-making concerning tax matters within the European Union is emphasized. Taxation, being a Member State prerogative, demands unanimous decisions by all EU countries—a process further complicated by various political factors including upcoming European Parliament elections. Achieving consensus among all 27 Member States remains a substantial challenge, with notable opposition from France and Germany stalling the legislative progress.

A Call for Tax Harmonisation

Going forward, EBAA persists in urging for tax harmonisation among Member States in Brussels to evade complexity and prevent distortion of competition. Advocacy for implementing a general tax regime applicable to all commercial air transport flights, inclusive of Business aviation flights operated for commercial purposes (e.g., flights operated under a CAT license), continues. Additionally, efforts are being made to redirect policy-makers’ focus towards granting fuel tax exemptions for all medical and humanitarian flights.

The Portuguese Carbon Tax Dilemma

Another significant concern discussed is the Portuguese carbon tax, initiated roughly two years ago, which presents considerable challenges for Business aviation operators due to a notably higher tax rate compared to that for airlines, stemming from a disparate and disproportionate tax calculation formula.

Seeking Legal and Practical Remedies

Concerns also surface regarding the inadequate consultations with industry experts, notably the absence of involvement from the Portuguese Civil Aviation Authority (ANAC) in formulating the tax. The differential in tax rates appears intentional, with the legislative process excluding industry input or updates, making substantial revisions a daunting task. In light of the challenges national measures pose to Business aviation, EBAA, in collaboration with one of its members, is actively exploring legal and practical avenues to challenge this tax. Hiring external legal consultation is being evaluated as a viable means to address the issue effectively.

Toward an Equitable Tax Framework

The discourse on the Portuguese carbon tax showcases the hurdles and worries the Business aviation industry faces while navigating a complex regulatory scenario. Given that taxation concerning Special Taxes or Excise duties remains a national competency, member states hold the discretion to enact these rules as they see fit. EBAA, along with its members, is diligently working to tackle these issues both legally and practically. The increasing need for coordination and advocacy at the European level is evident, as taxes targeting Business aviation seem more politically driven rather than rooted in genuine environmental considerations.

Continuous Advocacy and Engagement

As the sector continues adapting to new tax regulations, proactive engagement with policymakers and stakeholders on both European and national platforms is crucial to foster a fair and equitable taxation framework for all aviation facets. Taxation discussions are anticipated to be a recurring theme in forthcoming deliberations.

Reflecting Sustainability Commitments

Reflecting the industry’s dedication to sustainability while acknowledging the imperative to maneuver through a complex and evolving regulatory terrain is vital. As EBAA strides towards impacting the decision-making spectrum, a cohesive front and a well-articulated stance is pivotal in ensuring that the interests of Business aviation are deliberated within the broader ambit of Europe’s environmental aspirations.

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Please contact Máté Bajtay at