Company: AYR
Filing Date: 2025-04-23
Form Type: 10-K
Source: 0001628280-25-019189
Chunk: 111

Company: Aircastle LTD
Filing Date: 2025-04-23
Form: 10-K
Item: Item 1A
Chunk 111
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 capital gains taxes until March 2035. In December 2023, the Government of Bermuda enacted the Bermuda Corporate Income Tax Act (“CIT Act”) which imposes a 15% corporate income tax effective for tax years beginning on or after January 1, 2025, which overrides the Minister of Finance’s assurance from such date onwards. The Company will be subject to Bermuda corporate income tax with respect to its fiscal year beginning March 1, 2025 and subsequent years as a Bermuda constituent entity of a multi-national group. A multi-national group is defined for these purposes as a group with entities in more than one jurisdiction with consolidated revenues of at least €750 million for two out of the four previous fiscal years. If Bermuda constituent entities of a multi-national group are subject to tax under the CIT Act, such tax is charged at a rate of 15% of the net taxable income of such constituent entities as determined in accordance with and subject to the adjustments set out in the CIT Act (including in respect of foreign tax credits applicable to the Bermuda constituent entities). 

We may become subject to an increased rate of Irish taxation which would adversely affect our business.

Previously, Irish Revenue had issued certain confirmations regarding the application of the 12.5% tax rate to activities, such as leasing and financing, undertaken by Irish lessors. Irish Revenue has advised that these confirmations no longer apply, effective as of January 1, 2024. Instead, certain aspects of the Irish leasing regime have been codified into law in Finance Act (No.2) 2023 and Irish Revenue released guidance in January 2024 regarding the tax treatment of leasing companies. The combination of the revised law and guidance could impose a higher threshold on our Irish lessors and financing companies when demonstrating they have sufficient activity to avail themselves of the 12.5% tax rate on their leasing and financing activity. The changes, along with any associated restructuring that may be required, could increase our Irish effective tax rate.

Our Irish subsidiaries and affiliates are expected to be subject to corporation tax on their income from leasing, managing, and servicing aircraft at the 12.5% tax rate applicable to trading income. This expectation is based on certain assumptions, including that we will maintain at least the current level of our business operations in Ireland. The tax treatment of financing activity within the group, however, is much less certain.  If we are not successful in achieving trading status in Ireland, the non-trading income activities of our Irish subsidiaries and affiliates would be subject to