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Italian Luxury Tax Modified in Response to Industry Concerns

July 6, 2012

The Italian Parliament has passed legislation that significantly modifies a number of new taxes on aircraft that were first approved in December. At the urging of NBAA and other stakeholders, the new measure allows non-Italian registered aircraft to spend up to 45 consecutive days in Italy before being subject to the tax. The legislation has been approved by both the Italian Senate and Chamber of Deputies. The legislation has been officially published and signed by the President, meaning that it is now law in Italy.

The Revenue Agency has also adopted rules that describe payment methods and implementing rules.

Review the Revenue Agency Guidance (114 KB, PDF)

Note: This guidance is only published in Italian, there are free translation tools available, such as Google Translate.

The new legislation contains the following provisions:

  • The luxury tax applies only apply to non-Italian registered aircraft that spend more than 45 consecutive days in Italian territory. Any days the aircraft spends at an Italian maintenance facility do not count towards the 45 day allowance.
  • Current interpretations of the law do not indicate that the 45 day allowance is calculated on a cumulative basis. In other words, private aircraft can spend up to 45 consecutive days in Italy per trip.
  • Aircraft used in scheduled or non-scheduled commercial service are exempt from the luxury tax, but may be subject to the "aerotaxi" tax.
  • Non-Italian aircraft that spend more than 45 days in the country are subject to the tax on a pro-rata basis.
  • Charter or "aerotaxi" flights are subject to a 100 euro per passenger fee for flights less than 1500 km and a 200 euro per passenger fee for flights over 1500 km. This tax is designed to be paid by the charter operator. These taxes are due within 60 days of the new law becoming effective.

The new law has a retroactive effective date of December 28, 2011 for non-Italian registered aircraft. If any aircraft spent more than 45 days in Italy after December 28, the luxury tax will be effective within 90 days of the new legislation being approved.

Tax Rates for Aircraft in Italy Over 45 Days

Annual Tax Rates

Aircraft Maximum Takeoff Weight (MTOW) Tax Rate (Euro)
Up to 1,000 kg (2,200 lb) .75 per kg
Up to 2,000 kg (4,400 lb) 1.25 per kg
Up to 4,000 kg (8,800 lb) 4.00 per kg
Up to 6,000 kg (13,220 lb) 5.00 per kg
Up to 8,000 kg (17,600 lb) 6.65 per kg
Up to 10,000 kg (22,000 lb) 7.10 per kg
Above 10,000 kg (22,000 lb) 7.55 per kg

Details on the Aero Taxi Tax

The tax is due for each passenger on each leg of the flight. The per passenger tax for legs of less than 1,500km is 100 euros and for legs over 1,500 km amounts to 200 euros. For instance, a commercial flight Chicago-Rome and return with 2 passengers amounts to a tax of 800 euros.

Since the Decree became law on April 29, any flight operated after that date is subject to the tax even though until now the tax was initially not collectable as it is now. For those flights taking place between that date and June 30, payment is now due before July 31, 2012. For flights taking place after June 30, and for aircraft registered in Italy or any Member State of the EU or the European Economic Area (EEA), payment is due by the operator before the end of the month following the month when the flight took place.

For aircraft registered in a country outside the EU or the EEA, payment is due upon arrival on the Italian soil or before the aircraft leaves the Italian territory.

News

May 7, 2012
Italy Modifies Huge Business Aviation Tax
April 9, 2012
NBAA Takes Concerns about Aircraft Tax to Italian Embassy
January 6, 2012
As Woes Worsen, Italian Government Considers New Aircraft Taxes

For More Information

NBAA Members with further questions should contact NBAA’s Operations Service Group at [email protected].