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The aviation industry supports trade, employment and economic growth.  In 2015, airlines are forecasted to pay a total of USD 116 billion in taxes on a consolidated global level.

This amounts to approximately 48% of the industry’s Gross Value Added (industry’s equivalent to GDP). Unwarranted or excessive taxation on international air transport has a negative impact on economic and social development.


Our role

IATA, in conjunction with its industry partners, is committed to ensuring that airlines are subject to fair and efficient taxation measures with respect to their operations, regardless of location.

IATA works with the airline industry to ensure that government authorities worldwide honor and adhere to the International Civil Aviation Organization (ICAO), the Organization for Economic Cooperation and Development (OECD), and the United Nations taxation principles.  

In this regard, IATA is actively involved in a range of activities including:

  • Ensuring that new and existing taxation measures (be they direct or indirect) are fairly applied and adequately consider the economic and social ramifications;

  • Lobbying against measures that result in double taxation; and

  • Advocating against taxation measures that unjustly target the industry, where the resulting tax revenues are not reinvested in air transport related services and infrastructure.


    IATA on taxation

    Various forms of taxation impact the success and growth of the aviation industry. The demand for air travel is highly sensitive to changes in prices. Inefficient and burdensome tax measures that increase the cost of air travel will have a negative effect on demand. This, in turn, will hamper economic growth.

    Learn more about IATA’s positions on various forms of taxation impacting the industry:


    Direct Taxation

    Net Income Taxation (pdf) new
    Net Income Taxation (pdf) French


    Indirect Taxation
    Value Added Tax (pdf)
    Environmental/Green Taxation

    Green tax position paper (pdf)

    Green passenger air tax letter (pdf)


    Special Interest Taxation Measures

    Tourism tax (pdf)

    Solidarity tax (pdf)


    Recent developments in taxation


    VAT, The Bahamas

    • Levying VAT at 7.5% on passenger charges and fees related to international transport. 
      This treatment directly contradicts ICAO taxation policies on international air transport and the standard VAT treatment of exports.

    In June 2015, IATA submitted a letter to the Bahamian Ministry of Finance challenging the imposition of VAT (pdf) on the various charges and fees. 

    We are working closely with other industry associations (e.g. ALTA, National Airlines Council of Canada) to attempt to remove the VAT on the passenger charges and fees.


    VAT, Bangladesh

    • The Civil Aviation Authority Bangladesh and the National Board of Revenue is contemplating the levying of VAT on various aeronautical and non-aeronautical charges with retroactive effect dating back to FY2009-10.  This treatment directly contradicts ICAO taxation policies on international air transport.

    We have been liaising directly with the Bangladesh Government and local industry associations (e.g. BAR-Bangladesh) to remove the imposition of VAT  (pdf) on these charges.


    Ticket Tax, New Zealand

    • As part of the recently passed Border Clearance Levy Bill, New Zealand will introduce an arrival and departure fee for international travel beginning 1 January 2016. Such a fee contradicts Policies on Charges for Airports and Air Navigation Services contained in ICAO Document 9082, the Chicago Convention and ICAO taxation policies on international air transport.

    IATA has been actively involved in the consultation process initiated by the New Zealand Ministry of Primary Industries and the New Zealand Customs Service in relation to the Border Clearance Levy.

    In June 2015, we submitted a letter as part of the consultation process challenging the Border Clearance Levy (pdf) on both international regulatory and economic grounds.


    Ticket Tax / Special Interest Tax, Kingdom of Tonga

    • The Kingdom of Tonga is levying a departure tax of TOP 100 (approx. USD 50) on international travel from Tonga in order to fund services related to the 2019 Pacific Games.  Such a tax directly contradicts the Chicago Convention and ICAO taxation policies on international air transport.  The resultant average fare increase of 13.4% for a one-way ticket out of Tonga could negatively impact the Tongan tourism industry.

    IATA has been liaising directly with the Tongan Ministry of Finance and National Planning with respect to the removal of the departure tax. 

    IATA submitted several formal communications to the Tongan Government in June 2015 outlining the departure tax’s violation (pdf) of standard international principles of airline taxation and the negative economic consequences of the tax.


    Read more about our taxation policies in our archive of reports.

    Additional information

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