International Taxes

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Italian Luxury Tax Modified: Six Month Grace Period Provided

September 9, 2013

The Italian Parliament has again passed legislation that modifies a number of new taxes on aircraft that were first approved in December 2012. Law 97/2013 allows non-Italian registered private aircraft to remain in the country for up to 6 months in a 12 month period before being subject to the "luxury tax". These 6 months can be non-continuous over the course of a single 12 month period. This change was made to conform Italian law to European Union standards.

Initially, at the urging of NBAA and other stakeholders, the luxury tax measure was modified to allow non-Italian registered aircraft to spend up to 45 consecutive days in Italy before being subject to the tax. The current 6 month allowance under Law 97/2013 represents an additional improvement.

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 6 months in Italian territory. Any days the aircraft spends at an Italian maintenance facility do not count towards the 6 month allowance.
  • The 6 month period can be a non-continuous period, over a 12 months.
  • 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 6 months in the country during a 12 month period are subject to the tax on a pro-rata basis.
  • Charter or "aerotaxi" flights are subject to a per passenger tax for legs of less than 100 km of 10 euros, for legs between 100-1,500 km the tax is 100 euros and for flights over 1,500 km the tax is 200 euros.

Tax Rates for Aircraft in Italy Over 6 Months:

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 100 km is 10 euros, for legs between 100-1,500 km the tax is 100 euros and for flights over 1,500 km the tax is 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, 2012, any flight operated after that date is subject to the tax even though 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, 2012 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 info@nbaa.org.