CONTINUEThis site uses cookies. By continuing to browse this site you are agreeing to our use of cookies. Find out more.
  1. Front Page
  2. News By Topic
  3. Germany Divided Over Plane Tax

Germany Divided Over Plane Tax

by Ulrika Lomas,, Brussels

19 July 2010

The ongoing debate surrounding the proposed introduction of an airline tax in Germany has intensified following reports that Germany’s Economics Minister Rainer Brüderle has opposed the plans, warning of losses in revenue for the industry.

Clearly distancing himself from the plans, championed by Finance Minister Wolfgang Schäuble, Brüderle has warned that Germany could experience a decline in passenger numbers of between 4.5 and 6 million, adversely affecting jobs.

The ministry for economy and technology has reportedly heavily criticized the government’s decision not to tax connecting flights, arguing that it distorts competition, and unfairly disadvantages short flights, and noted that the negative effects of the proposed tax on small border airports in Germany such as Weeze and Hahn are of particular concern.

Equally opposed to the government’s controversial plans, the Federation of German Consumer Organizations (der Bundesverband der Verbraucherzentralen – VZBV) has emphasized that the airline tax will inevitably increase the burden on consumers. German airlines and airports have also criticized the proposals, outraged that thousands of jobs could be threatened as a result, noting that even slight increases in ticket prices could lead to fewer travellers. The introduction of similar taxes in other countries has shown that passengers save costs by travelling from airports in neighbouring countries.

Forming part of the German coalition government’s savings package, designed to save in the region of EUR80bn, the airline tax is expected to generate around EUR1bn annually for the state. From next year, the government aims to impose a EUR13 tax on domestic flights within Germany and on short flights to Europe, and a EUR26 tax on long-haul flights. Airlines have already confirmed their intention to pass the levy on to consumers by increasing ticket prices accordingly.

TAGS: individuals | tax | business | air passenger duty (APD) | aviation | Germany

To see today's news, click here.


Tax-News Reviews

Cyprus Review

A review and forecast of Cyprus's international business, legal and investment climate.

Visit Cyprus Review »

Malta Review

A review and forecast of Malta's international business, legal and investment climate.

Visit Malta Review »

Jersey Review

A review and forecast of Jersey's international business, legal and investment climate.

Visit Jersey Review »

Budget Review

A review of the latest budget news and government financial statements from around the world.

Visit Budget Review »

Stay Updated

Please enter your email address to join the mailing list. View previous newsletters.

By subscribing to our newsletter service, you agree to our Terms and Conditions and Privacy Policy.

To manage your mailing list preferences, please click here »