French business aviation tax: EBAA hopes for reprieve
French business aviation is hoping for a reprieve on the new tax. (Photocredit: StockCake).
Winning a last-minute reprieve to France’s swingeing new tax on commercial business aircraft departures is the hope of the European Business Aircraft Association (EBAA). Its French branch has appealed to the Paris government to nullify the new tax on the grounds that it is “unconstitutional”. And the association hopes for a quick decision, according to an online briefing this week.
Without a swift decision to cancel the new legislation, passenger-carrying commercial business aircraft will be subject to the new taxes from March 1st. The rate of the new tax – which does not apply to private flights – will vary depending on the distance travelled. Departures from France to domestic and European destinations on flights of up to 3,418 miles (5,500km) will be taxed at the rate of €420 (£350) per passenger on business aircraft powered by jet engines.
Turboprop and piston engine aircraft will incur about half that rate. Flights within France will be subject to an additional 10% Value Added Tax (VAT).
On longer flights of more than 3,418 miles, there will be a charge per passenger of €2,100 (£1,750). Operators will be responsible for collecting the fees, which will be reviewed each year. All flight distances are based on the length of journeys beginning at Paris Charles De Gaulle Airport. The new tax is expected to yield additional revenue of up to €1bn (£0.833m) for the French government.
‘They are going to kill companies’
The new tax structure represents a 300% hike to previous passenger taxes, said Charles Aguettant, chairman, EBAA France during the briefing. The association has lobbied the French government to explain that most business aircraft departures in France were related to economic growth or for medical and other life-critical missions with only a minority devoted to leisure. “We hope to have some discussion with them [the French government] to convince them that these taxes are ridiculous,” said Aguettant. “They are going to kill companies and not only French companies.”
Paul Tiba, board member EBBA France said the new fiscal measures were “a disaster tax” targeting business aircraft with 19 or fewer passengers. It remains unclear if business liners such as the ACJ TwoTwenty or the Boeing Business Jet with up to 19 passengers would be subject to the new tax or escape it. “It’s definitely only a political decision and not an economic or any kind of physical [sustainability] decision. It’s purely political,” said Tiba.
The EBAA worries the tax will damage the charter sector and exert a de-multiplier impact throughout the country’s general aviation. Casualties could include business aircraft support services such as FBOs, fuel services and other suppliers, warned webinar speakers.
It is thought that fractional flights, cargo flights without passengers and helicopter sorties will not be subject to the tax. The association is seeking urgent clarification on this and other related topics from the French government.
Nullification of the new tax
The association is pinning its hopes for a nullification of the new tax on an appeal to the Conseil Constitutionnel or Constitutional Counsel – the highest authority in France. “We have asked the Conseil Constitutionnel to declare that this article [tax proposal] is not in conformity with the constitution,” said Nicholas Fischel, secretary, EBAA, France.
The challenge partly rests on the assertion that air travel is fundamentally the same whether passengers fly on a scheduled airline flight or a business aircraft. “There is no objective difference between Air France and a business flight which can justify the different [level] of tax,” said Fischel. The counsel’s ruling may come as early as tomorrow, he added.
Meanwhile, last November the UK government increased the air passenger duty on all flights. The rates were increased by about £2 ($2.60) per passenger on short-haul flights. But the rate of air passenger duty on private jet flights was lifted by a further 50%.
The UK tax hike is thought to deliver a rise of about £104 per passenger for short flights to mainland Europe and $1,200 for a long-haul flights.
