Taxes in the Field of Aviation and their impact Final report CE Delft June 2019 EUROPEAN COMMISSION Directorate-General for Mobility and Transport Directorate Aviation Unit E.1 Contact: Flor Diaz Pulido, Head of Unit E-mail: [email protected] European Commission B-1049 Brussels 2 EUROPEAN COMMISSION Taxes in the Field of Aviation and their impact Final report Directorate-General for Mobility and Transport 2019 3 4 Taxes in the Field of Aviation and their impact – Final report Europe Direct is a service to help you find answers to your questions about the European Union. Freephone number (*): 00 800 6 7 8 9 10 11 (*) The information given is free, as are most calls (though some operators, phone boxes or hotels may charge you). LEGAL NOTICE This document has been prepared for the European Commission however it reflects the views only of the authors, and the Commission cannot be held responsible for any use which may be made of the information contained therein. More information on the European Union is available on the Internet (http://www.europa.eu). Luxembourg: Publications Office of the European Union, 2019 ISBN 978-92-76-08132-6 doi: 10.2832/913591 © European Union, 2019 Reproduction is authorised provided the source is acknowledged. Content 1. INTRODUCTION ................................................................................................... 13 1.1 Aim of the study ......................................................................................... 13 1.2 Scope of the study ...................................................................................... 13 1.3 Methodology of modelling aviation taxes ........................................................ 15 1.4 Outline of the report ................................................................................... 16 2. INVENTORY OF TAXES .......................................................................................... 17 2.1. Introduction ............................................................................................ 17 2.2. Data sources ............................................................................................ 17 2.3.1. IATA Ticket Tax Box Service (TTBS) .............................................................. 17 2.3.1. IATA Airport Charges Intelligence Centre ....................................................... 17 2.3.2. QPX Express API ......................................................................................... 17 2.3.3. ‘Taxes in Europe’ database .......................................................................... 18 2.3.4. Use of the various data sources in the study .................................................. 18 2.4. Type of taxes ............................................................................................. 19 2.4.1. Ticket taxes ............................................................................................... 19 2.4.2. Value Added Tax......................................................................................... 26 2.4.3. Taxation of aircraft fuel ............................................................................... 28 2.4.4. Environmental charges ................................................................................ 31 2.4.5. Taxes for air cargo ...................................................................................... 31 2.5. Comparison of taxes ................................................................................ 32 2.5.1. Aviation taxes in Europe .............................................................................. 32 2.5.2. Aviation taxes outside Europe ...................................................................... 35 2.6. Policies in the case of no-shows .............................................................. 37 3. MODELLING THE IMPACTS OF AVIATION TAXES ...................................................... 43 3.1. Introduction ............................................................................................ 43 3.1.1. How the model can be applied ...................................................................... 44 3.1.2. Treatment of fiscal revenues in the model ...................................................... 45 3.1.2. Outline of the chapter ................................................................................. 46 3.2. Data inputs .............................................................................................. 46 3.2.1. Base year .................................................................................................. 46 3.2.2. Passenger volumes ..................................................................................... 47 3.2.3. Ticket prices .............................................................................................. 48 3.2.4. Employment data ....................................................................................... 51 3.2.5. GDP data ................................................................................................... 51 3.3. Passenger groups .................................................................................... 51 3.4. Modelling taxes ....................................................................................... 52 3.4.1. Ticket taxes ............................................................................................... 52 3.4.2. VAT .......................................................................................................... 52 3.4.3. Excise duty ................................................................................................ 53 3.5. Impacts ................................................................................................... 54 3.5.1. Passenger demand ...................................................................................... 54 3.5.2. Change in number of flights and connectivity ................................................. 55 3.5.3. Jobs .......................................................................................................... 56 3.5.4. GDP .......................................................................................................... 58 3.5.5. Fiscal revenue from the aviation sector.......................................................... 60 3.5.6. CO2 emissions from the aviation sector.......................................................... 60 3.5.7. Noise ........................................................................................................ 61 4. IMPACTS OF AVIATION TAXES ON EU MEMBER STATES AND THE EU28 ...................... 62 4.1. Austria ..................................................................................................... 63 6 4.2. Belgium ................................................................................................... 65 4.3. Bulgaria ................................................................................................... 67 4.4. Croatia ..................................................................................................... 68 4.5. Cyprus ..................................................................................................... 70 4.6. Czech Republic......................................................................................... 71 4.7. Denmark .................................................................................................. 73 4.8. Estonia .................................................................................................... 75 4.9. Finland ..................................................................................................... 76 4.10. France ..................................................................................................... 78 4.11. Germany .................................................................................................. 80 4.12. Greece ..................................................................................................... 82 4.13. Hungary ................................................................................................... 84 4.14. Ireland..................................................................................................... 86 4.15. Italy ......................................................................................................... 88 4.16. Latvia ...................................................................................................... 90 4.17. Lithuania ................................................................................................. 91 4.18. Luxembourg ............................................................................................ 93 4.19. Malta ....................................................................................................... 94 4.20. The Netherlands ...................................................................................... 96 4.21. Poland ..................................................................................................... 98 4.22. Portugal ................................................................................................... 99 4.23. Romania ................................................................................................ 101 4.24. Slovakia ................................................................................................. 103 4.25. Slovenia ................................................................................................