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The International Civil Aviation Organization (ICAO) policy regarding taxation of international air transport encompasses the primary principle that there should be a reciprocal exemption for taxation on earnings of international air transport by States with respect to international airlines – consistent, amongst others, with Article 8 of the OECD Model Tax Convention on Income and Capital (pdf)

However, some ICAO Contracting States have deliberately breached this principle.

Where a State has not adopted the principle of reciprocal exemption on taxation of earnings, as recommended by ICAO, IATA believes that taxation of international airlines by a State should be done on a net income basis. This means that international airlines should be allowed to deduct all expenses incurred for the purposes of their economic activities in relation to that State, irrespective of where the expenses were incurred. These principles are consistent with the ICAO’s policy regarding the taxation of international air transport.

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Public Statement - March 2024

Read IATA's public statement on the revision of Article 8 of the UN Model Convention (pdf) at the 28th Session of the Committee of Experts on International Cooperation in Tax Matters (“UN Tax Committee”), 19-22 March 2024.

Position Papers

The information contained in this IATA Position Paper is intended to provide a better understanding of the airlines’ foreign taxation problems and is available in 3 languages:


EN. Position paper prepared by IATA (pdf) to explain the problems faced by international airlines in relation to taxation on income imposed by States in which they operate other than their own fiscal domicile

FR. Prise de position préparée par l’IATA (pdf) pour expliquer les problèmes rencontrés par les compagnies aériennes internationales relatifs à la taxation des revenus imposée par les Etats dans lesquels elles opèrent dans d’autres pays que leur domicile fiscal propre.

ES. Position Paper elaborado por IATA (pdf) para explicar los problemas a los que se enfrentan las compañías aéreas internacionales en relación con la tributación sobre ingresos en los Estados en los que operan, cuando son distintos de su domicilio fiscal. 

Taxation in Europe

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