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Germany's Ticket Tax Stays Constant In 2013

by Ulrika Lomas, Tax-News.com, Brussels

07 November 2012


Marking a small victory for airline companies, Germany’s black-yellow coalition government has decided not to increase its controversial plane ticket tax from January 1, 2013.

The decision is expected to result in savings next year for German airline companies of an estimated EUR40m (USD51m).

Consequently, the tax will continue to be imposed at a rate of EUR7.50, EUR23.43, or EUR42.18 on flights departing from German airports, depending on the destination.

Introduced in Germany at the beginning of 2011 to ensure that the aviation industry contributions to fiscal consolidation, the levy serves to generate around EUR1bn annually for the state. The tax was initially imposed at a rate of EUR8, EUR25, or EUR45 per passenger. Revised annually, these original rates were lowered at the beginning of 2012.

Last year, the plane ticket tax yielded EUR905.1m for the government. This year, experts expect revenues from the levy to be 20% lower. As at the end of September, income from the ticket tax stood at around EUR671m.

Opinion in Germany on the unpopular tax is very much divided. Environmental organizations insist that the measure does not go far enough and are calling for the tax rates to vary according to the type of ticket purchased, as well as to the destination.

German Transport Minister Peter Ramsauer supports the view of German airline companies and has called for an immediate end to the tax, while German Finance Minister Wolfgang Schäuble has ruled out the idea of abolishing the levy.

Germany’s aviation industry fiercely criticized the levy from the outset, arguing that the tax costs airline companies around EUR500m a year.

Klaus-Peter Siegloch, President of the German Aviation Federation BDL, warned back in the summer in Berlin that the plane ticket tax is much too expensive and is driving airline companies into the red. The country’s four largest airline companies last year paid 60% of the EUR1bn levy, Siegloch explained.

According to Siegloch, the government’s decision to proceed unilaterally and to impose the tax at national level has served to distort competition and to severely disadvantage domestic airline companies and airports.

Passengers are electing to fly from airports in neighbouring countries, such as Zurich, Strasbourg, and Amsterdam, and are even changing their booking patterns to avoid the levy, for example by purchasing two tickets instead of one long-haul ticket, BDL argues, insisting that without the tax, passenger numbers would be up by around five million.

TAGS: tax | aviation | travel and tourism | tax rates | Germany

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