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;
• Advocating against taxation measures that unjustly target the industry, where the resulting tax revenues are not reinvested in air transport related services and infrastructure.            
• 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;
• 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 (pdf). 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: English (pdf) - French (pdf) - Spanish (pdf) 
• Direct Taxation: Country-by-Country Reporting & Related Requirements (pdf)
• Indirect Taxation:  Value Added Tax (pdf)
• Environmental/Green Taxation:Green tax position paper (pdf) 
• Special Interest Taxation Measures: Tourism tax (pdf) Solidarity tax(pdf)

And more generally: Aviation taxes and charges (pdf)

Recent developments in taxation

Proposed Canadian Carbon Pricing Scheme

IATA recognizes the importance of the Canadian Federal Government’s initiative to reduce national greenhouse gas emissions. The commercial aviation industry first developed a set of goals for a responsible, cross-sector approach to our share of the climate challenge in 2008. In the eight years since, we have witnessed a substantial shift towards collaboration on climate-related projects between industry partners and government regulators.
As stated in our submission to the proposed scheme (pdf), IATA firmly believes that international and inter-jurisdictional domestic air transport should be excluded from the scope of provincial carbon taxes/levies and cap and trade regimes.

Increase in the passenger movement charge in Australia

The Australian Government recently announced a proposal to increase the Passenger Movement Charge (PMC) from AUD 55 to AUD 60 per departing international passenger. This proposal not only contradicts ICAO and international standards on taxation, but more broadly, will have a negative impact on Australian economy. IATA submitted a letter opposing the increase (pdf) and has called for a full review of the rationale of the PMC with a view to its abolition.

Download impact assessment (pdf) of the removal of the passenger movement charge

Air Transportation Tax, Norway

The Norwegian Government recently announced that it was planning on introducing an air transportation tax equivalent to NOK 80 on departing passengers on both domestic and international flights effective 1 April 2016.  Further, we understand that this tax is to be subject to Norwegian VAT at a rate of 10% for domestic flights. 
This tax directly contradicts ICAO taxation policies and will have a detrimental impact on the Norwegian economy if implemented. 

In December 2015, IATA submitted a letter to the Norwegian Minister of Finance (pdf) challenging the imposition of the air transportation tax and calling for its repeal.

IATA also reacted to the Norwegian Government’s Consultation Paper on the Air Passenger Tax in February 2016. See IATA's letter (pdf) and comments (pdf)

IATA continues to strongly oppose and challenge this tax on economic and tax policy grounds and requests that the tax be withdrawn.

In a recent development IATA and other European Aviation associations have sent the attached letter(pdf) to the Norwegian government expressing their continued strong opposition to the proposed passenger tax.

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. 

​Further documentation

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

IATA Industry Taxation Meeting

Each year, IATA and the Industry Taxation Working Group (ITWG) bring together the aviation taxation community to discuss and define the key issues, campaigns, policies, emerging trends as well as to identify and set out the priorities for action. This event also provides a unique networking opportunity.

This year, the meeting will take place on 25-26 September at the Convention Centre Dublin and will focus on how Aviation Tax Burdens Matter for Airlines’ P&L.

Meeting highlights

• Close look at the state of the industry
• Worldwide tax developments
• An update from State tax authorities2, e.g. India Central Board of Excise and Customs on the implementation of the national GST regime, plans to simplify the EU VAT system and OECD/BEPS implementation, others
• Ancillary income = Treaty fundamentals and different country application
• Aircraft leasing and tax implications
• Revisions to the UN and OECD Model Tax Conventions
• Breakout sessions to discuss important regional topics in smaller groups
• Interactive and informal panels on current tax issues – proliferation of VAT regimes around the world (e.g., India, GCC, Egypt, Malaysia) and the challenges faced to incorporate best practices for international aviation (Spain), new ticket tax developments in various countries
• An update from ICAO on aviation taxation policies
• … and more

Agenda

Find out more about this year's event in the 2017 IATA Industry Taxation Meeting program (pdf).

Registration

This year’s annual tax meeting will be held in conjunction with IATA’s 2017 World Financial Symposium and is free of charge for IATA member airlines and SPP Members participating in industry taxation activities.

• Register now!