Taxes in the field of aviation and their impact : final report.
Date: 2019-06-06
Institutions: Directorate-General for Mobility and Transport
Subjects: EU Member State, VAT, air transport, database, economic consequence, environmental impact, environmental tax, input-output analysis, reduction of gas emissions, tax system

Taxes in the Field of Aviation 
and their impact 

Final report 

CE Delft 
June 2019 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
EUROPEAN COMMISSION 

Directorate-General for Mobility and Transport 
Directorate Aviation  
Unit E.1 

Contact: Flor Diaz Pulido, Head of Unit 

E-mail:  MOVE-E1-SECRETARIAT@ec.europa.eu 

European Commission 
B-1049 Brussels 

2 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
EUROPEAN COMMISSION 

Taxes in the Field of Aviation 
and their impact 

Final report 

Directorate-General for Mobility and Transport  

2019 

3 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
4 

 
 
 Taxes in the Field of Aviation and their impact – Final report 

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Content 

1. 

INTRODUCTION ................................................................................................... 13 

Aim of the study ......................................................................................... 13 
1.1 
1.2 
Scope of the study ...................................................................................... 13 
1.3  Methodology of modelling aviation taxes ........................................................ 15 
1.4  Outline of the report ................................................................................... 16 

2. 

INVENTORY OF TAXES .......................................................................................... 17 

2.1.  Introduction ............................................................................................ 17 
2.2.  Data sources ............................................................................................ 17 
2.3.1. IATA Ticket Tax Box Service (TTBS) .............................................................. 17 
2.3.1. IATA Airport Charges Intelligence Centre ....................................................... 17 
2.3.2. QPX Express API ......................................................................................... 17 
2.3.3. ‘Taxes in Europe’ database .......................................................................... 18 
2.3.4. Use of the various data sources in the study .................................................. 18 
2.4.  Type of taxes ............................................................................................. 19 
2.4.1. Ticket taxes ............................................................................................... 19 
2.4.2. Value Added Tax......................................................................................... 26 
2.4.3. Taxation of aircraft fuel ............................................................................... 28 
2.4.4. Environmental charges ................................................................................ 31 
2.4.5. Taxes for air cargo ...................................................................................... 31 
2.5.  Comparison of taxes ................................................................................ 32 
2.5.1. Aviation taxes in Europe .............................................................................. 32 
2.5.2. Aviation taxes outside Europe ...................................................................... 35 
2.6.  Policies in the case of no-shows .............................................................. 37 

3.  MODELLING THE IMPACTS OF AVIATION TAXES ...................................................... 43 

3.1.  Introduction ............................................................................................ 43 
3.1.1. How the model can be applied ...................................................................... 44 
3.1.2. Treatment of fiscal revenues in the model ...................................................... 45 
3.1.2. Outline of the chapter ................................................................................. 46 
3.2.  Data inputs .............................................................................................. 46 
3.2.1. Base year .................................................................................................. 46 
3.2.2. Passenger volumes ..................................................................................... 47 
3.2.3. Ticket prices .............................................................................................. 48 
3.2.4. Employment data ....................................................................................... 51 
3.2.5. GDP data ................................................................................................... 51 
3.3.  Passenger groups .................................................................................... 51 
3.4.  Modelling taxes ....................................................................................... 52 
3.4.1. Ticket taxes ............................................................................................... 52 
3.4.2. VAT .......................................................................................................... 52 
3.4.3. Excise duty ................................................................................................ 53 
3.5.  Impacts ................................................................................................... 54 
3.5.1. Passenger demand ...................................................................................... 54 
3.5.2. Change in number of flights and connectivity ................................................. 55 
3.5.3. Jobs .......................................................................................................... 56 
3.5.4. GDP .......................................................................................................... 58 
3.5.5. Fiscal revenue from the aviation sector.......................................................... 60 
3.5.6. CO2 emissions from the aviation sector.......................................................... 60 
3.5.7. Noise ........................................................................................................ 61 

4. 

IMPACTS OF AVIATION TAXES ON EU MEMBER STATES AND THE EU28 ...................... 62 

4.1.  Austria ..................................................................................................... 63 

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4.2.  Belgium ................................................................................................... 65 
4.3.  Bulgaria ................................................................................................... 67 
4.4.  Croatia ..................................................................................................... 68 
4.5.  Cyprus ..................................................................................................... 70 
4.6.  Czech Republic......................................................................................... 71 
4.7.  Denmark .................................................................................................. 73 
4.8.  Estonia .................................................................................................... 75 
4.9.  Finland ..................................................................................................... 76 
4.10.  France ..................................................................................................... 78 
4.11.  Germany .................................................................................................. 80 
4.12.  Greece ..................................................................................................... 82 
4.13.  Hungary ................................................................................................... 84 
4.14.  Ireland..................................................................................................... 86 
4.15.  Italy ......................................................................................................... 88 
4.16.  Latvia ...................................................................................................... 90 
4.17.  Lithuania ................................................................................................. 91 
4.18.  Luxembourg ............................................................................................ 93 
4.19.  Malta ....................................................................................................... 94 
4.20.  The Netherlands ...................................................................................... 96 
4.21.  Poland ..................................................................................................... 98 
4.22.  Portugal ................................................................................................... 99 
4.23.  Romania ................................................................................................ 101 
4.24.  Slovakia ................................................................................................. 103 
4.25.  Slovenia ................................................................................................. 105 
4.26.  Spain ..................................................................................................... 106 
4.27.  Sweden .................................................................................................. 108 
4.28.  United Kingdom ..................................................................................... 110 
4.29.  EU28 ...................................................................................................... 113 

5. 

CONCLUSIONS .................................................................................................. 115 

REFERENCES ............................................................................................................ 117 

A 

B 

C 

D 

E 

F 

G 

OVERVIEW OF TAXES ......................................................................................... 124 

VAT RULES USED IN SCENARIOS ......................................................................... 130 

REGIONAL BREAKDOWN FOR TAX RATES .............................................................. 131 

C.1  Austria Air Transport Levy ......................................................................... 131 
C.2 
French Air Passenger Solidarity Tax/Civil Aviation Tax ................................... 132 
C.3  German Air Transport Tax .......................................................................... 132 
C.4 
Italy Embarkation Tax ............................................................................... 133 
C.5  Sweden Air travel tax ................................................................................ 134 
C.6  United Kingdom Air passenger duty ............................................................ 135 

VAT RATES IN THE EUROPEAN UNION .................................................................. 136 

SALES TAXES OUTSIDE THE EU ........................................................................... 144 

E.1 

Canadian GST/HST ................................................................................... 144 

EXCHANGE RATES USED ..................................................................................... 145 

NOISE AND EMISSION CHARGES ......................................................................... 146 

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Executive summary 
Aviation has a unique fiscal regime. On the one hand, in many countries it is subject to 
specific taxes and charges, such as a departure tax or a solidarity levy. On the other 
hand, aviation fuel is generally exempt from excise duty and many countries exempt 
tickets from VAT or apply a zero VAT rate in case of international aviation. Moreover, the 
Chicago Convention does not allow for taxation of fuel that is on board of aircraft when 
they land in a jurisdiction, and other ICAO documents urge States to refrain from taxing 
international aviation. EU regulation of taxes requires a unanimous decision of the 
Council. 

This study has made an inventory of taxes in the EU and selected non-EU countries. 
It has also estimated economic and environmental impacts of these taxes and of tax 
exemptions. 

In EU Member States, VAT or other taxes on domestic aviation are the most prevalent 
and exist in 17 Member States. Six Member States levy taxes on international aviation, 
invariably in the form of ticket taxes for passengers departing from airports in the 
Member State. The highest average tax rates are in the UK followed by Italy, Norway, 
Germany and France. Figure 1 shows the average aviation taxes per passenger in the EU 
and EFTA, defined as the total receipts of aviation taxes divided by the total number of 
passengers.  

Figure 1 – Average aviation taxes per passenger in the EU and EFTA. Weighted average for domestic 
and international passengers 

8 

 
 
 
 
 
 
 
 
 
Figure 2 presents taxes levied on international passengers only. These include only ticket 
taxes, as international aviation is exempt from VAT. 

Figure 2 – Average aviation taxes per passenger in the EU and EFTA, for international passengers 

Note: The value of tax exemptions has not been quantified. 

Outside the EU, 13 mandate countries (i.e. countries which the EU negotiates EU Air 
Service Agreements with), as well as Australia, Canada, the United States, Hong Kong, 
Brazil and Japan all tax aviation activities. In most cases, the taxes are ticket or 
departure taxes, i.e. a fixed amount per passenger, sometimes depending on the 
destination or class of travel. Some countries levy VAT or sales taxes, i.e. a levy 
proportional to the value of the ticket. This is done, for example, in Japan, Mexico, the 
USA and Canada. Fuel on domestic flights is sometimes taxed, e.g. in the USA. In 
contrast, fuel used on international flights is generally exempt from fuel taxes, and 
international flights are generally not subject to VAT. Figure 3 shows how the taxes in 
non-EU countries compare to taxes in EU countries. The figure presents weighted 
average taxes for domestic and international flights (left hand side), as well as taxes for 
international flights only (right hand side). Australia and Oman have relatively high 
taxes, and tax levels in Mexico and Brazil are particularly high for international flights. 

9 

 
 
 
 
 
 
 
 
Figure 3 – Average aviation taxes per passenger in selected countries 

Domestic and international flights

International flights

€ 0

United Kingdom
Italy
Norway
Germany
France
EU28
Sweden
Austria
Greece
Finland
Spain
Romania
Croatia
Slovakia
Poland
Portugal
Switzerland
Czech Republic
Latvia
Australia
Canada
United States
Hong Kong
Japan
Oman
Mexico
Armenia
Bahrain
Brazil
Qatar
Vietnam
United Arab Emirates
China
Indonesia
Kuwait
Singapore
Thailand
Malaysia

A
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Average tax burden per passenger
€ 20

€ 30

€ 10

€ 40

r
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Average tax burden per international passenger

€ 0

€ 10

€ 20

€ 30

€ 40

€ 50

A
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United Kingdom
Italy
Germany
EU28
Sweden
France
Norway
Austria
Portugal
Australia
United States
Hong Kong
Mexico
Brazil
Oman
Armenia
Bahrain
China
Qatar
United Arab Emirates
Kuwait
Singapore
Thailand

Note:  Countries not mentioned in the figure do not apply aviation specific (indirect) taxes or apply a zero tax 

rate for certain taxes; the value of tax exemptions has not been quantified. 

Taxes lower demand and have economic and environmental impacts. This study has 
developed a model to provide a global indication of some impacts, notably: 

1.  Passenger demand. 

2.  Change in the number of flights and connectivity. 

3.  Jobs (direct and indirect). 

4.  GDP. 

5.  Fiscal revenue from the aviation sector. 

6.  CO2 emissions. 

7.  Noise. 

There are two ways of modelling the economic impacts of taxes. One is to model the 
impacts of taxes in isolation, the other is to model the impacts in combination with 
simultaneous changes in government expenditures or other taxes which occur because of 
the change in fiscal revenues. The literature on environmental tax reform, as well as a 
number of studies on aviation taxes, have generally adopted the latter approach, which 
takes into account that the fiscal revenue of a tax is ploughed back in the economy 
though higher government expenditures or lower taxes, and that a tax exemption has 
the opposite effect. This study has followed the same approach. 

The modelling showed that for the aviation sector, tax exemptions result in higher 
passenger demand, a larger aviation sector (both in terms of jobs and value added) and 
more flights. For the wider economy, this means increased connectivity, which is 
correlated with a higher GDP, although there is a discussion in the academic literature on 
whether there is a causal relation and, if so, whether an increase in connectivity causes 
an increase in GDP or the other way round. These impacts are counteracted by the fact 
that tax exemptions for one sector imply lower government spending or higher taxes for 
other sectors, which affects them negatively (both in terms of jobs and value added). 
Whether or not the total economic impacts are positive or negative on balance, depends 

10 

 
 
 
 
 
 
 
 
on the structure of the economy. The environmental impacts of tax exemptions are 
negative, as they result in more noise and emissions. Imposing taxes has the opposite 
effect. 

This study has analysed the impacts of taxes and tax exemptions for aviation in all 
EU Member States and for the EU28 on average. 

Currently, the weighted average aviation tax in the EU across all Member States and 
destinations amounts to € 11 per ticket. If all aviation taxes in the EU would be 
abolished, the number of passengers would increase by 4%. This would result in an 
approximately equivalent increase in the number of flights, connections, jobs in the 
aviation sector and value added in the aviation sector. The CO2 emissions of aviation 
would increase by 4% and the number of people affected by airport noise by 2%. 
Because of either lower government expenditures or higher taxes on other activities, 
most of the increase in jobs would be compensated by a decrease in employment in 
other sectors. The overall impact on GDP would be 0.2%. 

Conversely, abolishing the exemption of energy taxation on aircraft fuel would, if it were 
possible, result in an increase of the average ticket price by 10% and a decrease in 
passenger demand of 11%. This has a negative impact on employment in the aviation 
sector (11% reduction) and value added (11% reduction). The CO2 emissions of the 
aviation sector would decrease by 11% and the number of people affected by airport 
noise by 8%. The higher fiscal revenues offset the negative effects on employment and 
value added in the aviation sector completely, as a result of which the impact on 
employment and GDP is negligible. 

As for the impact of taxation on ticket prices, aviation employment and connectivity in 
the Member States, the analysis found that it would be the largest in Belgium and the 
Netherlands when a fuel excise duty on kerosene of € 330 per 1000 litres1 was 
introduced. In the Netherlands this could lead to average ticket prices rising by 19%, 
adversely impacting connectivity and aviation employment which would fall by 19% and 
20% respectively. In Belgium the average ticket prices would rise by 16%, while 
connectivity and aviation employment both would fall by 17%. Both countries effectively 
have no aviation taxes at present, hence the relative impact of introducing a fuel excise 
duty would be significant. The total GDP impact would amount to +0.2% of GDP in the 
Netherlands and no impact in Belgium. The impacts on overall employment would be 
negligible. 

Some studies have partially reached different conclusions on the impacts of aviation 
taxes and tax exemptions on GDP and employment. In most cases, the differences are 
due to the fact that those studies have assessed the impacts of a combination of a tax 
and austerity, or of a tax exemption and fiscal stimulus. In other words, these studies do 
not assume that the tax revenues result in higher government or household expenditures 
which have economic impacts, but rather that they increase or reduce the budget deficit 
or surplus.  

Other studies, which do not assess the impacts of a combination of a tax and austerity, 
reach similar conclusions, i.e. that the impacts of the introduction of an aviation tax on 
jobs and GDP are small when it is accompanied by a simultaneous change in government 
extenditure or in other taxes. 

In conclusion, the analysis showcases that new or increased aviation taxes would 
generally have a negative impact on the aviation industry (lower direct employment and 
direct value added) but its impact on the overall employment within a Member State, on 
fiscal revenue and GDP would be close to zero. New or increased taxes would reduce the 

1 The comparison is based on the scenario that analyses the introduction of an excise duty on kerosene in order to 

make the impact on Member States comparable. 

11 

 
 
 
 
 
 
 
 
                                                 
number of passengers and flights as well as the environmental impacts. Any changes in 
tax regimes must be carefully analysed especially because the role of aviation as a 
priority industry varies significantly between Member States. 

12 

 
 
 
 
 
 
1. Introduction 

Aviation has a unique fiscal regime. On the one hand, in many countries it is subject to 
specific taxes and charges, such as a departure tax or a solidarity levy. On the other 
hand, aviation fuel is often exempt from excise duty and many countries exempt tickets 
from VAT or apply a zero VAT rate. 

Taxes increase the cost of the good or service that is taxed and lower the demand. 
Lower demand for aviation may result in lower aviation activity, which in turn may result 
in lower connectivity and lower economic growth, but also in less congestion, lower 
negative environmental impacts and noise. In addition, aviation taxation has proven to 
result in substantial substitution effects of travel demand, both to other modes of 
transport and to foreign airports where no or lower taxes apply. 

The extent to which taxes result in lower competitiveness is subject to a debate. 
International Air Transport Association (IATA) has published a methodology for its 
assessment (IATA, 2007). However, the approach may be improved to bring it more in 
line with commonly accepted methods for evaluating the economic impacts of changes in 
transport links (see e.g. CE Delft, 2013). 

The European Commission has recognized the importance of aviation taxes in its Aviation 
Strategy for Europe (EC, 2015), where it writes: “Current aviation taxes and levies 
applied by Member States over and above the normal profit tax may negatively impact 
connectivity and competitiveness”. In order to be able to assess the impacts, the Aviation 
Strategy announces that the Commission will “publish an inventory of those taxes and 
levies and examine their impact”. This study is intended to form a basis for such a 
publication. 

1.1  Aim of the study 

This study aims to examine the tax regimes that collect revenue from air passengers and 
air cargo in Europe and other selected countries or regions.  

More specifically, the objectives are to: 

1.  Examine the tax regimes that collect revenue from air passengers and air cargo in 
Europe and other selected countries or regions. It describes the existing taxes, 
measures the level of tax collected, and compares them. 

2.  Provide a calculation method (and the calculation itself) that estimates the 

positive and negative impact of taxation on air transport and the EU Member 
States.  

3.  Develop a user-friendly tool that could be used by public authorities and 

stakeholders to estimate the impacts of (new) aviation taxes.  

1.2  Scope of the study 

The scope of the study is limited to aviation taxes. Taxation of other modes of transport, 
goods and services is outside the scope. 

For a fair comparison between countries, the study includes all taxes and charges that 
are related to the aviation industry and used for general public purposes. This means 
that the study includes all taxes that are specific to the aviation industry, as well as 
general taxes that affect the industry for which there is a special regime for aviation, 
such as VAT and luxury tax. Both passenger and cargo taxes are included. 

13 

 
 
 
 
 
 
The study assesses in detail how taxes are collected; what they are used for; whether 
any earmarking is applied and whether tax revenues collected on aviation are re-injected 
somehow into the aviation business. 

Although airport charges are generally used for providing facilities and services for civil 
aviation, there may be cases in which airport charges are passed on to the treasury and 
used for general public purposes. For a fair comparison between countries we treat 
charges that are directly passed on to the treasury and are used for general public 
purposes as ‘indirect taxes’ and include them in the study. 

Outside the scope of the study are taxes and charges that are: 

•  Not specific to the aviation industry and for which there is no special regime for 

aviation: corporate tax or labour tax, withholding tax on aircraft leases or interest 
payments, tax depreciations in respect of capital expenditure, customs duties and 
import tariffs. 

•  Not used for general public purposes: taxes/charges levied to defray the costs for 
specific aviation-related services such as infrastructure development, financing 
security costs, bird-strike prevention, environmental monitoring, financing fire 
services and safety as well as cargo inspection and handling costs. Noise and 
emission taxes/charges are levied to internalise external costs. Generally, these 
charges are levied by airports to finance measures taken to reduce noise 
pollution. Examples are isolation of houses, financing incentive schemes for 
airlines to use quieter aircraft, noise-reducing screening walls, changing flight 
procedures, avoiding flying around residential areas, etc.2 This means that funds 
raised from security and noise charges or taxes are generally ring-fenced, and 
therefore they are not considered as taxes throughout this study. 

The study identifies the aviation specific (indirect) taxes in the European Union Member 
States (EU28), countries in the European Economic Area (EEA), Switzerland, states with 
which the EU has an aviation agreement (US, Canada), similar aviation clusters (Japan, 
Australia, Brazil) as well as “mandate countries”3: Armenia, Bahrain, China, Kuwait, 
Mexico, Oman, Qatar, Saudi Arabia, Turkey, United Arab Emirates, Brunei, Cambodia, 
Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand and Vietnam. 

The study covers the aviation taxes which were effective at the time of writing this report 
(June 2018). 

The economic and environmental impacts are analysed for the 28 EU Member States. 

The tax inventory in Chapter 2 includes taxes on air cargo and full freight flights. 
However, the modelling of the impacts excludes air cargo since this falls outside the 
scope of our study.  

2   See for example https://www.fraport.com/content/fraport/en/our-company/responsibility/aircraft-noise-
infoservice/noise-abatement.html#id_tab__our-company_responsibility_aircraft-noise-infoservice_noise-
abatement_active-noise-abatement 

3   Mandate countries are (i) countries for which the EU has the mandate to negotiate an EU Air Service 

Agreement with (Armenia, ASEAN (Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, 
Singapore, Thailand, Vietnam), Azerbaijan, Brazil, Qatar, Tunesia, Turkey and UAE); and (ii) countries for 
which there are requests for further negotiations (Bahrain, China, Kuwait, Mexico, Oman and Saudia 
Arabia, as per the EU Aviation Strategy’s external aviation policy (https://ec.europa.eu/transport/ 
modes/air/aviation-strategy/external_policy_en#timeline-entry-3202). 

14 

 
 
 
 
 
 
 
                                                 
1.3  Methodology of modelling aviation taxes 

There are several ways to model aviation taxes, which are related to how the fiscal 
system is modelled. 

A change in aviation taxes can either be a revenue-neutral tax reform, or change the 
total fiscal revenue.  

In case of a revenue-neutral tax reform, a change in aviation taxes would be mirrored by 
a change in other taxes of the opposite sign. The impact on employment, welfare and 
GDP depends on how the revenues are recycled (Patuelli et al., 2001; Bovenberg et al., 
1997) (Ballard et al., 1985). However, because this report does not model specific tax 
reform proposals, but aims to provide information on general tax reforms, the economic 
impacts are modelled as a net-zero demand impulse, where an increase (decrease) in 
aviation taxes results in a drop (jump) in demand for aviation services, with an offsetting 
rise (decrease) in demand in other sectors. The change in demand for the products and 
services of other sectors is based on the distribution of household consumption over 
these sectors. 

In case of a change in fiscal revenue, the impact on GDP depends on how the change 
affects the economy. This can be either: 

•  a change in public spending; or 

•  a change in the government deficit or surplus. 

In the former case, modelling the GDP impacts as a net-zero impulse makes sense 
because the change in public spending will change the output of economic sectors and 
thus value added (Ballard et al., 1985). 

In the latter case, impact on GDP is harder to determine. A lowering of fiscal revenue 
would require the government to borrow more, thus driving up interest rates and 
lowering investment and borrowing. At the same time, the fiscal stimulus would result in 
higher demand. The balance of these two counteracting factors is hard to determine. 
(An increase in fiscal revenue would have the opposite effect).  

However, when a change in taxation of the aviation sector results in a change of total 
fiscal revenues, the impacts of the change in taxes cannot be disentangled from the fiscal 
stimulus (in case taxes are lowered) or austerity (in case taxes are increased).  

Studies on environmental tax reform generally assume that environmental taxes are 
recycled (e.g. Ekins, 2007), (Conefry et al., 2008), (Williams et al., 2014).  

In summary, except in the case where environmental taxes are part of a fiscal stimulus 
or an austerity package, the right way to model their impact on GDP is to assume that 
simultaneous with the change in aviation taxes, either other taxes are changed, or 
government expenditures change. This report follows that very path, which is often taken 
in the academic literature on tax reforms, and not uncommon to independent studies on 
aviation taxes. 

15 

 
 
 
 
 
 
 
 
 
1.4  Outline of the report 

Chapter 2 contains an inventory of aviation taxes and a comparison of tax levels in the 
EU and in selected other countries. 

Chapter 3 identifies the economic and environmental impacts and presents the 
methodology and data used to calculate them.  

Chapter 4 presents the impacts of taxes and tax exemptions on Member States. 

Chapter 5 presents the conclusions. 

16 

 
 
 
 
 
 
 
2. Inventory of Taxes 

2.1. Introduction 

This chapter presents an inventory of all taxes and tax exemptions that apply to aviation 
in the European Union Member States (EU28), countries in the European Economic Area 
(EEA), Switzerland, states with which the EU has an aviation agreement (US, Canada), 
similar aviation clusters (Japan, Australia, Brazil) as well as ‘mandate countries’. 

Section 2.2. describes the data sources used for identifying the various taxes. Thereafter, 
it introduces the various types of taxes applicable to the aviation industry. Section 2.5 
provides a benchmark of the tax regimes in the various countries. The final section 
describes airline policies for reimbursement of taxes and charges in case of a  
no-show4.  

2.2. Data sources 

Four data sources were used to identify the various aviation specific (indirect) taxes: 
IATA’s Ticket Tax Box Service (TTBS) data, IATA’s Airport Charges Intelligence Centre, 
information on taxes levied upon actual tickets as well as the ‘Taxes in Europe’ database 
of the European Commission. Each of these sources is described in more detail below.  

2.3.1. IATA Ticket Tax Box Service (TTBS) 

IATA’s TTBS 5 functions as an industry reference for taxes, fees and charges levied on 
passenger tickets. For the purpose of this study an excerpt of the database for 
EU28+EFTA6 was provided by IATA. The data contains effective rates as of 10 October 
2017, and also states foreseen changes or implementation of new taxes for 2018. 
Most profoundly this considers the implementation of Swedish Air Travel Tax in April 
2018 and a 50% reduction of the Austrian Air Travel Tax as per 1 January 2018.  

2.3.1. IATA Airport Charges Intelligence Centre 

IATA’s Airport Charges Intelligence Centre (ACIC) is an online tool including information 
on different types of charges, fees and taxes for airports worldwide. In this inventory of 
taxes, ACIC data was used to collect information on noise and emission charges, and 
other environmental taxes.  

2.3.2. QPX Express API 

To verify the data from the TTBS and to identify taxes for countries for which TTBS data 
was not available (being all countries outside EU28+EFTA), we use the QPX Express API. 

The QPX Express API7 is a web service which can be used to collect offered air fares on 
specific air routes. The service provides detailed information on charges and taxes levied 

4  

In this report, a no-show is defined as a passenger who does not take their flight for whatever reason. 
This is a different definition from the one dealing specifically with the passenger rights regulation 
(COM/2013/0130 final) where a passenger who does not take the first leg of the return ticket is, as a 
common practice, denied boarding for the second leg.  

5   http://www.iata.org/services/finance/Pages/ttbs.aspx  

6   European Free Trade Association including: Iceland, Liechtenstein, Norway and Switzerland. 

7   https://developers.google.com/qpx-express/  

17 

 
 
 
                                                 
to passengers, including the names of the taxes and the country in which they are 
imposed. Data is provided for all taxes and charges which are stated on the passenger’s 
ticket and levied on the based fare. For each country, fares are collected for one 
domestic, one short-haul8, and one long-haul route. In total, this results in fares 
collected for 232 routes for which 1,559 resulting passenger fees and charges were 
identified9. 

2.3.3. ‘Taxes in Europe’ database 

The ‘Taxes in Europe’ database is an online tool provided by the European Commission 
covering the main taxes in force in the EU Member States10. For each tax, the database 
contains information on its legal basis, assessment base, main exemptions, rates, 
economic and statistical classification, as well as the generated revenue.  

The database covers: 

•  all main taxes in revenue terms, such as personal and corporate income taxes, 

value added taxes, and EU harmonised excise duties; 

•  main social security contributions; 

•  other important taxes yielding at least 0.1% of GDP. 

Customs duties and tariffs are not included, but these are out of scope in this study, as 
they are not considered as specific taxes for air transport. 

This database was addressed for the following purposes: 

1.  Collecting information on relevant taxes other than ticket taxes. 

2.  Information on tax collection procedures and identification of the ultimate 

beneficiary. 

3.  Verification of the taxes identified from other data sources. 

2.3.4. Use of the various data sources in the study 

The TTBS data was used to identify all relevant aviation specific (indirect) taxes and their 
rates in the EU28 and the EFTA states. The data was cross-checked with the data from 
QPX Express API. The two sources provided identical information and are therefore 
considered highly reliable. The TTBS extract that we obtained did not include data on 
taxes for the non-EU and EFTA states. For these states we solely used the QPX Express 
API.  
IATA’s ACIC data was used to collect information on environmental taxes, most notably 
noise and emission charges.  

8   For the purpose of this study, a short-haul route was defined as a route with a stage length shorter than 
3,500 km. Flights up to this stage length are typically operated by narrow-body aircraft. In terms of 
operations and costs, these differ from wide-body operations generally deployed on long-haul routes.  

9   For each of the 57 countries data on three different routes was collected (171 routes in total). In addition, 
we collected data for an inbound domestic, short-haul and long-haul flight for each country. This required 
61 additional routes adding up to a total of 232 routes. In the output data, in total 1559 fees and charges 
were identified for these routes.  

10   The ‘Taxes in Europe’ database is the European Commission’s on-line information tool covering the main 

taxes in force in the EU Member States. The system contains information on around 650 taxes, as provided 
to the European Commission by the Ministries of Finance of the EU Member States. The data is not 
validated as such by the Commission.  

https://ec.europa.eu/taxation_customs/taxes-europe-database-tedb_en  

18 

 
 
 
 
 
 
                                                 
The ‘Taxes in Europe’ database was used to collect information on tax exemptions and 
specific legislation for the respective taxes.  

Table 1 – Overview of data sources and the data that each covers 

Data source 

TTBS 

Airport Charges 
Intelligence 
Centre (ACIC) 

QPX Express 

‘Taxes in Europe’ 

Geographic 

EU28 + EFTA 

Worldwide 

Type of taxes and 
charges 

Aviation related 
passenger-based 
taxes, shown 
explicitly on air 
tickets 

All airport charges 
levied to airlines. 
Used to collect data 
on environmental 
taxes and charges.  

All relevant 
countries 

Aviation related 
passenger-based 
taxes, fees and 
charges, shown 
explicitly on air 
tickets 

Measurement 

Effective rates 

Effective rates 

Effective rates 

Source 

IATA 

IATA 

Search engine 

EU28 

Main taxes levied in 
each Member State 

Effective rates 
Exemptions 
Legislation 

European 
Commission 

2.4.  Type of taxes 

Aviation may be subject to different types of taxes. This section presents taxes on 
aviation as levied by the countries considered. The following types of taxes are 
distinguished: 

1.  Ticket taxes. 

2.  Value added tax. 

3.  Taxation on aircraft fuel. 

4.  Environmental taxes. 

5.  Taxes for air cargo. 

2.4.1. Ticket taxes 

Ticket taxes are taxes imposed on all air passengers to the benefit of national (or 
regional) government’s treasury. Examples are the UK Air Passenger Duty (APD) or the 
German Air Transport Tax. 

Table 2 provides an overview of ticket taxes levied in Europe, as well as those levied in 
the selection of non-European countries.  

19 

 
 
 
 
 
 
Table 2 – Effective ticket taxes in the considered countries11 

Clusters  Country 

Tax name 

Effective rate 
(May 2018; 
per passenger 
unless 
indicated 
otherwise) 

Austria 

Flugabgabe/Austria Air Transport Levy 

€ 3.50  

(short haul) 

€ 7.50 

(medium haul) 

€ 17.50 

(long haul) 

France 

France Civil Aviation Tax 

€ 4.48 

€ 8.06 

€ 1.33 

Air Passenger Solidarity Tax 

€ 1.13  

€ 11.27 

€ 4.51 

€ 45.07 

Fiscal Tax (Corsica) 

€ 4.57  

A
T
F
E
+
U
E

(within EEA)) 

(all other) 

per tonne of 
freight 

(within EEA + 
French overseas; 
economy class) 

(within EEA + 
French overseas; 
business/first 
class) 

(outside EEA; 
economy class) 

(outside EEA; 
business/first 
class) 

(for all 
passengers 
to/from Corsica) 

Germany 

Luftverkehrsteuer/German Air Transport Tax 

€ 7.47  

(short haul) 

€ 23.32  

(medium haul) 

€ 41.99 

(long haul) 

Italy* 

Italy Embarkation Tax 

€ 6.57 

Domestic 

Italy City Council Tax 

Italy Luxury Tax 12 

€ 12.69 

(EU & EEA) 

€ 18.14 

(Non-EEA) 

€ 7.07  

€ 10  

€ 100 

(distance 
< 100 km) 

(distance 
< 1,500 km) 

11   See  Annex  C  for  a  detailed  definition  of  rates  for  Austria,  Germany,  France,  Italy,  Sweden  and  United 

Kingdom. 

12   The Italian Luxury Tax (or Aero Taxi Tax) only concerns passengers travelling on executive air charter flights 

(https://www.agenziaentrate.gov.it/wps/content/nsilib/nsi/schede/pagamenti/imposta+erariale+sui+voli+
dei+passeggeri+di+aerotaxi/cosa+imposta+aerotaxi?page=pagamentiimpostecitt) 

20 

 
 
 
 
                                                 
Clusters  Country 

Tax name 

Sweden 

Air travel tax 

United  
Kingdom** 

Air Passenger Duty 

Norway 

Norway Air Passenger Tax 

USA 

US International Departure Tax 

Brazil 

Embarkation fee 

s
r
e
t
s
u
l
c

n
o
i
t
a
v
a

i

Effective rate 
(May 2018; 
per passenger 
unless 
indicated 
otherwise) 

€ 200 

€ 6.26  
(SEK 60) 

€ 26.06  
(SEK 250) 

€ 41.70  
(SEK 400) 

€ 14.42  
(£ 13) 

€ 28.85  
(£ 26) 

€ 86.54  
(£ 78) 

€ 86.54  
(£ 78) 

€ 173.10  
(£ 156) 

€ 499.24  

(£ 450) 

€ 8.77  

(NOK 82) 

€ 15.04  

(USD 18) 

(distance 
> 1,500 km) 

(domestic/EU) 

(ICA < 6,000 km) 

(all other) 

(lowest class  
< 2,000 miles) 

(all other classes  
< 2,000 miles) 

(aircraft > 20 
tonnes for < 19 
pax;  
< 2,000 miles) 

(lowest class  
> 2,000 miles) 

(all other classes  
> 2,000 miles) 

(aircraft  
> 20 tonnes for  
< 19 pax ;  
> 2,000 miles) 

€ 3.44 - € 7.99  
(BRL 8.01 – 
19.62) 

domestic 
(depending on 
airport category) 

€ 30.70  

international 

(USD 36) 

r
a

l
i

m
S

i

Hong Kong  Hong Kong Air Passenger Departure Tax 

€ 12.85  

Australia 

Australia Passenger Movement Charge 

(HKD 120) 

€ 40.28  

(AUD 60) 

Bahrain 

Bahrain Passenger Service Fee International 

€ 15.71  

e
t
a
d
n
a
M

s
e
i
r
t
n
u
o
c

China 

China Airport Fee 

(BHD 7) 

€ 6.36  
(CNY 60) 

(domestic) 

21 

 
 
 
 
 
 
 
 
 
 
 
 
Clusters  Country 

Tax name 

Kuwait 

Kuwait Airport Departure Tax 

Mexico 

Mexico Airport Departure Tax  

Oman 

Oman Airport Tax 

Qatar 

Qatar Airport Fee International 

United Arab  
Emirates 

United Arab Emirates Passenger Facilities Charge 

Singapore 

Singapore Aviation Levy 

Thailand 

Thai international departure/arrival fee 

Effective rate 
(May 2018; 
per passenger 
unless 
indicated 
otherwise) 

€ 11.44  

(international) 

(domestic) 

(international) 

(domestic) 

(international) 

(CNY 90) 

€ 6.27  
(KWD 2) 

€ 16.25  
(MXN 400) 

€ 37.53  
(MXN 900) 

€ 4.36  
(OMR 2) 

€ 21.76  
(OMR 10) 

€ 9.26  
(QAR 35) 

€ 7.96  
(AED 35) 

€ 3.79  
(SGD 6.10) 

€ 0.76  
(THB 30) 

*  

Italy has different ticket tax rates for its airports. In order to model this we determined the weighted average tax for 
each of the groups of ticket taxes based on the 10 largest Italian airports in terms of passengers. The luxury tax for 
private aircraft was not included in our model since the IATA data did not specify the type of aircraft used to transport 
the passengers.  

**  

For the UK the higher rates (e.g. for private jets) were not included in our model since the IATA data did not specify 

the type of aircraft used to transport the passengers.  

Note: 

Applied exchange rates are listed in Annex F. 

Source:  IATA TTBS, QPX Express API. 

22 

 
 
 
 
 
 
 
For the countries with ticket taxes effective in January 2018, the table below outlines 
how these taxes are collected, and whether revenues are earmarked or re-invested in the 
aviation industry. 

Table 3 – Collection process and beneficiaries of ticket taxes 

How are taxes collected? 

Beneficiary,  earmarking  or  re-injection 
in aviation business 

Austria13 – 
Aviation tax 

The tax debtor is the aircraft owner 
performing the departure. The airport owner 
of the domestic airport from which the 
departure is undertaken bears liability for 
the tax. 

Beneficiary is the Austrian Minsitry of 
Finance. There is no specific earmarking of 
revenues.  

By documentation of the Austrian 
Parliament, the tax is defended as follows: 

“Aviation plays a significant role in the 
emission of harmful substances. At the 
same time, fuels for aviation are exempted 
from consumption-based energy taxes due 
to European directives and international 
agreements. This leads to a tax preference 
for air traffic within the means of transport 
powered by fossil fuels. The levy is intended 
to influence the choice of means of 
transport in the area of private transport by 
reducing this imbalance in relation to the 
environmental impact of individual modes of 
transport. As the ticket price for a 
passenger flight continues to decline, there 
is no adequate awareness of the 
environmental costs of air traffic. The 
intended steering effect is necessary for 
passenger transport because the total 
number of departures of persons from 
Austrian airports increased by 9% between 
2005 and 2009. By contrast, for example, 
the total weight of departures of freight 
transport has declined over the same 
period. 

If  there  is  any  additional  tax  burden  on  air 
traffic on  the basis  of  EU  law  requirements, 
an  evaluation  of  the  Flight  Abatement  Act 
should  be  carried  out  in  order  to  avoid  any 
double taxation”14. 

The revenues of the Civil Aviation Tax accrue 
to  the  “Air  Control  and  Operations”  budget 
and the general state budget. The shares of 
the revenues of the tax that are allocated to 
the  respective  budgets  are  determined  by 
the Finance Act. 

The tax debtor shall itself calculate the levy 
and shall submit a tax statement to the tax 
office (Finanzamt) no later than on the 15th 
day (due date) of the second calendar 
month following the calendar month in 
which the tax liability arose (statement 
period). The tax statement must be 
submitted electronically. 

France15  (Civil 
Aviation Talx) 

As of 1 January 2006, a civil aviation tax is 
due by public air transport companies. The 
tax is eligible for all commercial flights.  

The airlines shall, by the last day of each 
month, submit a form provided by the Civil 
Aviation Administration, stating the number 
of passengers and the mass of cargo and 
mail embarked the previous month for 
flights made from France. Airlines which 
have declared less than € 12,000 in the 
previous years should make quarterly 
declarations instead of monthly 
declarations. These monthly or quarterly 
declarations shall be addressed to the 
accountants in the annex budget "Air 
Control and Operations". At the same time, 
the taxpayers pay the tax and the additional 

13  

14  

15  

https://www.bmf.gv.at/steuern/a-z/flugabgabegesetz/flugabgabe.html  

https://www.parlament.gv.at/PAKT/VHG/XXIV/I/I_00981/fnameorig_201069.html  

https://www.ecologique-solidaire.gouv.fr/taxes-aeronautiques 

23 

 
 
 
 
                                                 
How are taxes collected? 

Beneficiary,  earmarking  or  re-injection 
in aviation business 

contribution (solidarity tax, see below), by 
bank transfer. 

France15 
(Solidarity 
Tax) 

In addition to the civil aviation tax (above), 
a solidarity tax is in place. The tax is 
collected in the same way as described 
above.  

Revenues of this tax accrue the solidarity 
fund for development, as created by Article 
22 of law no. 2005-1720 of December 30th, 
2005.  

The fund provides aid to developing 
countries, particularly in the field of health 
care.  

Revenues accrue to the federal government. 
There is no specific mention of earmarking 
of revenues. The tax rates are linked to the 
involvement of air transport in the trading 
of greenhouse gas emission certificates 
(ETS), as noted in the Aviation Tax Act: 

“The Federal Ministry of Finance shall be 
authorised, in agreement with the Federal 
Ministry for the Environment, Nature 
Conservation and Nuclear Safety, the 
Federal Ministry of Transport, Building and 
Urban Affairs and the Federal Ministry for 
Economic Affairs and Technology to reduce 
the tax rates pursuant to subsection 1 
above by a certain percentage with effect 
from the beginning of a calendar year by 
statutory order without the consent of the 
Upper House of the German Federal 
Parliament (Bundesrat). The percentage 
reduction shall be calculated from the 
relation of the respective receipts of the 
previous year from the involvement of air 
transport in trading with greenhouse gas 
emission certificates to one billion euros. 
The receipts from the involvement of air 
transport in trading with greenhouse gas 
emission certificates shall be estimated on 
the basis of the receipts of the respective 
first six months of the previous year.”  

Revenues accrue to the national treasury. 
Part of the revenues are reserved for 
payments to “institutions and companies 
that manage airport complexes or terminals 
for goods or passengers, under Law No. 
47/1974 and 117/1974”. No further special 
ear-marking of revenues is mentioned.  

Germany 16 – 
Aviation tax 

The tax debtor is the aviation enterprise 
which makes the departure. In addition, the 
representative in tax matters is also the tax 
debtor. The tax debtor must file the tax 
using the official form by the 10th day after 
the end of the calendar month in which the 
tax accrued or in which a tax exemption 
was utilised, in which the tax is computed 
by the filer of the return for the calendar 
month concerned (self-assessed tax return). 
The tax is due on the 20th day after the end 
of the calendar month in which it accrued. 

Italy17 - 
Embarkation 
Tax and  

Passenger boarding duty is a tax which is 
levied on the carrier, from any Italian 
airport, of chargeable passengers on 
chargeable aircraft in accordance with Law 
No. 324/76. It is payable by the operator of 
the aircraft, whilst the owner of the aircraft 
is kept jointly liable with the operator should 
the latter be in default18. 

Assessment, collection and payment of the 
taxes fall under the responsibility of the 
Ministry of Transport, in consultation with 
the Ministry of Finance.  

Italy–City 
Council Tax19 

In addition to the embarkation tax (above), 
a city council tax is in place. The tax is 
collected in the same way as described 
above. 

Law 350/2003 (Art. 11), in which the City 
Council Tax is introduced for the year 2004, 
mentions the following regarding allocation 
of revenues: 

16   http://www.zoll.de/EN/Businesses/Aviation-tax/aviation-tax_node.html 

17   https://www.enac.gov.it/repository/contentmanagement/information/p185836070/eal_22.pdf 

18   https://l2baviation.com/tax/italy-2/;http://www.assaereo.it/documenti/LEGGE324-76.pdf; 

http://www.edizionieuropee.it/LAW/HTML/89/zn95_26_074.html  

19   http://www.mit.gov.it/mit/mop_all.php?p_id=01077 (Art. 11). 

24 

 
 
 
                                                 
Beneficiary,  earmarking  or  re-injection 
in aviation business 

“The tax revenues are allocated to the State 
budget. For the subsequent reassignment 
for the part exceeding 30 million euro, a 
special fund is set up with the Ministry of 
the Interior and is reallocated into the 
aviation sector according to the following 
criteria: 

a) 20% of the total in favour of the 
municipalities of the airport or with 
neighbouring municipalities, according to 
the average of the following percentages: 
percentage of surface of the municipal 
territory incorporated in the airport 
enclosure on the total of the area; 
percentage of the total area of the 
municipality up to the maximum limit of 
100 square kilometres; 

b) in order to achieve effective measures to 
protect the safety of persons and structures, 
80% of the total for financing measures 
aimed at preventing and combating crime 
and enhancing security in airport facilities 
and in the main railway stations.” 

Revenues accrue to national treasury, as 
collected by HM Revenue and Customs. 
According to the UK Treasury, “Air 
passenger duty is primarily a revenue 
raising duty which makes an important 
contribution to the public finances, whilst 
also giving rise to secondary environmental 
benefits". As such, revenues are not 
specifically earmarked or re-invested in the 
aviation industry. 

How are taxes collected? 

UK–Air 
Passenger 
Duty 20 

Air Passenger Duty (APD) is due by 
operators of aircraft used for the carriage of 
chargeable passengers from any UK airport. 
These operators must register for APD. 
Operators can use an online service to 
register with HM Revenue and Customs. 
Non-EU operators must appoint a fiscal 
representative in the UK.  

Payment of duty is required on a monthly or 
annual basis: by the 22nd day immediately 
following the accounting period to which the 
remittance relates for payments made by 
cash, cheque or postal order; and by the 
29th day immediately following the 
accounting period to which the remittance 
relates for payments made by direct debit 
or credit transfer. 

20   https://www.gov.uk/government/publications/excise-notice-550-air-passenger-duty/excise-notice-550-air-

passenger-duty  

25 

 
 
 
 
                                                 
2.4.2. Value Added Tax 

According to ICAO (policy doc 863221), the “normal practice with respect to the sale or 
use of international transport is to [apply a] zero [VAT] rate”. IATA endorses ICAO’s 
resolutions on taxation22. IATA argues that a zero VAT rate should be applied because 
international air transport generally takes place outside any tax jurisdiction. Moreover, 
applying an industry-wide zero VAT rate helps to foster a level playing field. As IATA puts 
it, equitable treatment for international aviation throughout the many jurisdictions into 
which it operates is essential. Domestic air transport is often subject to VAT.  

Besides imposing VAT on (mainly domestic) air fares, states may also impose VAT on 
fuel, or on charges such as airport charges, air navigation charges or service fees.  

Under the EC directive on the common system of Value Added Tax (2006/112/EC)23, 
EU Member States may exempt passenger transport from VAT or apply a zero VAT rate. 
The following air transport related activities should be exempt from VAT (Article 148) – 
for commercial air traffic on international routes: 

• 

• 

• 

the supply of goods for the fueling and provisioning of aircraft; 

the supply, modification, repair, maintenance, chartering and hiring of aircraft, 
and the supply, hiring, repair and maintenance of equipment incorporated or used 
therein; 

the supply of other services as mentioned in the point above, to meet the direct 
needs of the aircraft or of their cargoes. 

Table 4 shows the effective VAT rates on domestic flights in Europe, as well as similar 
taxes in the considered non-European countries. European countries follow ICAO’s 
guidelines by not charging VAT on international air transport. Most European countries do 
charge VAT on domestic flights. Some countries apply reduced rates (e.g. Sweden), 
whereas other countries apply general VAT rates up to 27%. Annex D provides a 
complete overview of VAT rates and VAT exemptions in the EU. 

Outside the EU, Mexico charges a 4% transportation tax on international air travel, and 
Canada and USA charge sales or transportation tax for flights between USA and Canada 
and in the case of USA flights to Mexico. 

Table 4 – VAT or similar taxes and rates in the considered countries levied on aviation 

Cluster 

Country 

Tax name 

Effective rate (domestic flights 
only, unless stated otherwise) 

A
T
F
E
+
U
E

Austria 

Belgium 

Bulgaria 

Croatia 

VAT 

VAT 

VAT 

VAT 

Czech Republic  VAT 

Estonia 

Finland 

France 

Germany 

Greece 

Hungary 

VAT 

VAT 

VAT 

VAT 

VAT 

VAT 

13% 

6% 

20% 

25% 

15% (on regular transport) /  
21% (otherwise) 

20% 

10% 

10% 

19% 

24% 

27% 

21   https://www.icao.int/publications/Documents/8632_3ed_en.pdf  

22   https://www.iata.org/policy/Documents/value-added-tax.pdf  

23   http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2006:347:0001:0118:en:PDF  

26 

 
 
 
 
 
 
 
 
 
                                                 
Cluster 

Country 

Tax name 

Italy 

Latvia 

Lithuania 

Luxembourg 

Netherlands 

Poland 

Portugal 

Romania 

Slovakia 

Slovenia 

Spain 

Sweden 

Norway 

Switzerland 

VAT 

VAT 

VAT 

VAT 

VAT 

VAT 

VAT 

VAT 

VAT 

VAT 

VAT 

VAT 

VAT 

VAT 

s
r
e
t
s
u
l
c

n
o
i
t
a
v
a

i

Canada 

Canadian Goods and Services Tax 

Canada 

Canadian Harmonized Sales Tax 

Canada 

Quebec sales tax 

United States 

US Transportation Tax 

Effective rate (domestic flights 
only, unless stated otherwise) 

10% 

12% 

9% (Public passenger 
transportation services 
on established regular routes) / 
21% (other) 

3% 

21% 

8% 

6% 

19% 

20% 

9.5% 

10% 

6% 

10% 

8% 

5%  
(domestic/USA flights only) 

0-10%  
(depends on state)24 
9.98% 

7.5%  
(domestic flights/CAN/MEX only) 

10% 

8% 

r
a

l
i

m
S

i

e
t
a
d
n
a
M

s
e
i
r
t
n
u
o
c

Australia 

Australian Goods and Services Tax 

Japan Consumption Tax 

Japan 

Mexico 

Mexico 

Mexico Transportation Tax IVA Domestic 

4-16% 

Mexico Transportation Tax IVA International  4% 

Indonesia 

VAT 

Malaysia 

Thailand 

Vietnam 

Malaysia Goods and Services Tax 

VAT 

VAT 

10% 

6% 

7% 

10% 

Note: 
Effective rate is 0% for the EU countries that are not listed in the table. 
Source:  IATA TTBS, vatlive.com (for non-EU countries), European Commission25. 

24   Provincial GST rates are listed in Annex D. 

25   https://ec.europa.eu/taxation_customs/sites/taxation/files/resources/ 
documents/taxation/vat/how_vat_works/rates/vat_rates_en.pdf  

27 

 
 
 
 
 
 
 
                                                 
2.4.3. Taxation of aircraft fuel 

Aircraft fuel, for commercial operations, is exempt from excise duty as per Energy Tax 
Directive 2003/96/EC (Article 14(1)(b))26. This article states that “Member States shall 
exempt the following from taxation […]: energy products supplied for use as fuel for the 
purpose of air navigation other than in private pleasure-flying.” 

However, Member States may abolish this exemption for intra-Community and domestic 
flights, following Article 14(2) of the Energy Tax Directive: “Member States may limit the 
scope of the exemptions [..] to international and intra-Community transport. In addition, 
where a Member State has entered into a bilateral agreement with another Member 
State, it may also waive the exemptions provided for in paragraph 1(b) and (c)”. 

The minimum excise duty rate for kerosene, according to the Energy Tax Directive, is 
€ 330/1,000 L. This value is used to quantify the magnitude of the jet fuel tax 
exemption. It should however be noted that according to Article 14(2) of the Directive, 
rates below the minimum may be applied when States decide to waive the exemptions. 
Currently, there are no EU Member States that waive the tax exemption on jet fuel on 
domestic flights. 

The EU tax exemption of aircraft fuel is based on the international provisions of the 1944 
ICAO Chicago Convention 27. ICAO however does not explicitly prohibit the taxation of jet 
fuel. Article 24 states that “Fuel […] on board an aircraft of a contracting state, on arrival 
in the territory of another contracting State and retained on board on leaving the 
territory of the State shall be exempt from customs duty, inspection fees or similar 
national or local duties and charges.” This implies that the jet fuel tax exemption only 
applies to the taxation of fuel which is already on board, but not on the intake of fuel in 
another state.  

However, ICAO policy document 8632 on taxation 28 elaborates further on the taxation of 
jet fuel in clause 1(c). The document states that “it is the common practice of many 
States with respect to aircraft engaged in international transport generally to exempt all 
fuel and lubricants on board of arrival in each customs territory and, on a basis of 
reciprocity, to exempt from or refund taxes on fuel and lubricants taken on board at the 
final airport in that customs territory”. The intake of jet fuel is exempted from taxation in 
all Member States, which is in line with Article 14(1)(b) of EC Directive 2003/96.  

The exemptions from taxation on jet fuel is often explicitly mentioned in bilateral air 
service agreements. For example the EU/US Air Transport Agreement (2007/339/EC)29 
states: “There shall also be exempt, on the basis of reciprocity, from the taxes, levies, 
duties, fees and charges […] with the exception of charges based on the cost of the 
service provided:[…] fuel, lubricants and consumable technical supplies introduced into or 
supplied in the territory of a Party for use in an aircraft of an airline of the other Party 
engaged in international air transportation[.]” 

In individual countries’ position vis-à-vis ICAO policy document 8632, most countries 
considered in this study comply with ICAO resolutions that – based on reciprocity – 
intake of jet fuel is not taxed. Some countries included some reservations in this respect 
in their statement. In Europe, these were Germany, Norway, Sweden and Switzerland.  

26   https://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2003:283:0051:0070:EN:PDF 

https://ec.europa.eu/taxation_customs/business/excise-duties-alcohol-tobacco-energy/excise-duties-
energy/excise-duties-other-energy-tax-legislation_en  

27   https://www.icao.int/publications/pages/doc7300.aspx  

28   https://www.icao.int/publications/Documents/8632_3ed_en.pdf  

29   https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32007D0339&from=EN  

28 

 
 
 
 
 
 
 
                                                 
 
In the case of Germany the following passage was included: “The Government of 
Germany may decide[d] to introduce also in international commercial air transport a tax 
on the consumption of fuel and lubricants as well as a taxation on the sale and use of 
international passenger air transport. ”Norway includes the following passage: “[…] 
Norway questions the reasons for the tax exemption concerning fuel in the Resolution. 
Tax policy in respect of environmental protection may be a reason for introducing taxes 
on fuel for the use by aircrafts in general. For domestic flights, a tax on fuel is applicable 
in Norway (effect from 1 January 1999). The revenue from this tax accrues direct to the 
Norwegian Exchequer”.  
According to the position of Sweden: “In light of the discussions in various fora about 
market based measures as tools in the limiting of the impact of international civil aviation 
on climate change, our opinion is that taxes levied on the uplift of lift or levied on air 
transport should not be ruled out as possible future measures.” A similar position is put 
forward by Switzerland: “The Swiss Confederation generally supports and applies ICAO’s 
policies on taxation in the field of air transport as set out in Doc 8632. Notwithstanding 
the Council’s resolution, the Swiss Confederation is in favour of market-based 
measures aimed at reducing or limiting the environmental impact of aviation.” 

Systematic data on excise duties on jet fuel is difficult to obtain. Keen and Strand (2006) 
provide an overview for some countries up until 2006.30 Based on government and other 
web sources, information on jet fuel taxation in the considered non-European countries 
was obtained. Apart from the US – on which elaborated below – other countries such as 
Canada, Australia and Japan levy excise duties on jet fuel. Rates vary between € 0.02 
per litre in Australia to € 0.70 per litre in Hong Kong.  

Table 5 – Excise duty on jet fuel 

Country  Rate  Unit 

€ per 
litre 

Tax in 
%* 

Source 

Canada 

0.03 

CAD per 
litre 

0.08 

7% 

https://www.canada.ca/en/revenue-
agency/services/forms-
publications/publications/currate/current-rates-excise-
taxes.html 

https://taxmap.irs.gov/taxmap/pubs/p510-
008.htm#TXMP440314d6  

0.044  USD per 

0.01 

9% 

United 
States 

Hong 
Kong 

6.51 

gallon 

HKD per 
litre 

0.70 

175% 

https://www.customs.gov.hk/en/trade_facilitation/dutia
ble/types/ 

Australia 

0.035
56 

AUD per 
litre 

0.02 

6% 

https://www.ato.gov.au/business/excise-and-excise-
equivalent-goods/fuel-excise/excise-rates-for-fuel/ 

Japan 

18 

Armenia 

27 

JPY per 
litre 

AMD per 
kg 

0.14 

34% 

https://www.env.go.jp/en/policy/tax/20170130_greeni
ng.pdf 

0.05 

12% 

http://www.parliament.am/legislation.php?sel=show&I
D=1472&lang=eng 

Saudi 
Arabia 

0.02 

Laos 

14% 

Myanmar  5% 

5% 
(dome
stic 
flights 
only) 

14% 

http://gulfbusiness.com/saudi-apply-5-tax-fuel/ 

http://www.vdb-loi.com/wp-
content/uploads/2017/04/Lao-Tax-Booklet-2016.pdf  

5% 

http://download.pwc.com/mm/gobig/pdf/tax-
updates_may2017.pdf 

30   M. Keen and J. Strand (2006). Indirect taxes on international aviation. IMF Working Paper WP/06/124. 

29 

 
 
 
 
 
 
 
 
 
 
                                                 
Country  Rate  Unit 

€ per 
litre 

Tax in 
%* 

Source 

Philippin
es 

4 

PHP per 
litre 

0.07 

17% 

https://business.mb.com.ph/2018/01/02/aviation-fuel-
lubricants-hit-by-high-excise-taxes/ 

Thailand 

4 

THB per 
litre 

0.10 

25% 

https://af.reuters.com/article/idAFL4N1FH1WE 

Vietnam 

3,000  VND per 

0.11 

28% 

litre 

http://vijagas.vn/en/environment-tax-increase-will-not-
raise-gasoline-retail-price-in-vietnam-official.html 

Note: 
*: 

For countries not included, no information was found after extensive desk research.  
Tax in % is based on an average jet fuel price of € 0.40 per litre (March 2018). 

TAXATION OF AVIATION FUEL IN THE US 

For commercial aviation, the federal tax rate in the US is US$0.044 per gallon 
(€ 0.010 per litre)31. 
For non-commercial aviation kerosene is generally taxed at $0.244 per gallon 
(€ 0.054 per litre). In addition, states or local authorities can levy additional taxes on 
aviation fuel. Figure 4 shows that these vary between $0 (Texas, Ohio and Delaware) 
and $0.328 (Illinois) per gallon (€ 0.072 per litre). As mentioned above, international air 
carriers may be exempted from these taxes as agreed in bilateral Air Service 
Agreements, as is the case in the EU-US agreement.  

According to the Federal Aviation Authority (FAA), these state or local taxes accrue to 
airport revenues and should only be used for operating costs of the airport or other 
facilities related to air transportation, or for the support of state aviation programs32. 
The FAA is currently in the process of reviewing whether local or state authorities comply 
with the FAA’s Policy Concerning the Use of Airport Revenues. This is not always the 
case. For example in Florida, 8% of the state aviation fuel tax revenue is allocated to a 
general revenue fund (FDOT, 2017). 

31   https://taxmap.irs.gov/taxmap/pubs/p510-008.htm#TXMP440314d6 

32   https://www.faa.gov/airports/airport_compliance/aviation_fuel_tax/ 

30 

 
 
 
 
 
 
                                                 
Figure 4 – State taxes on jet fuel vary between $ 0.001 and $ 0.328 per gallon 

Source:  https://taxfoundation.org/combined-effective-commercial-jet-fuel-tax-rates-and-fees-state/ 

2.4.4. Environmental charges 

Airlines may also be subject to environmental charges, most notably noise and emission 
charges. Annex G presents these charges for the countries considered in this study. 

These environmental charges are generally levied by airports, and revenues accrue to the 
airport. Earnings are often reinvested in the aviation sector, for example to fund noise 
abatement programs33. As revenues are not used for general public purposes, these do 
not comply with the definition of taxes in this study, and will therefore not be included in 
our inventory or our model. 

2.4.5. Taxes for air cargo 

In some cases, civil aviation tax is levied on air freight as well. For the purpose of this 
study, this has been checked for all EU countries. Within the EU, only the French civil 
aviation tax is levied on air freight, with a rate of € 1.33 per ton of freight34.  

33   See for example http://www.fraport.com/content/fraport/en/our-company/responsibility/aircraft-noise-

infoservice/noise-abatement.html#id_tab__our-company_responsibility_aircraft-noise-infoservice_noise-
abatement_active-noise-abatement 

34   https://www.ecologique-solidaire.gouv.fr/taxes-aeronautiques#e4  

31 

 
 
 
 
 
                                                 
Air cargo may be subject to various charges and fees. These include customs duties and 
import tariffs, safety and inspection costs and handling costs. These charges are however 
not seen as taxes, as these are levied to defray the costs of provided services.  

In some countries (part of) the inspection costs are covered by public resources, leading 
to inspection cost differences across airports or countries (BCI, 2015). Cost differences 
may also arise from varying levels in efficiency or cost-effectiveness of inspection 
authorities. EC Regulation 882/2004 does apply certain minimum rates to be charged 
throughout the EU for official controls of goods and live animals introduced in the 
community (EC, 2004).  

Import and export customs duties also form a source of costs for air cargo users. As said, 
these are out of scope of this analysis as they are generally no specific charges for air 
transport. 

2.5. Comparison of taxes 

An extensive overview of taxes and charges is provided in Annex A. The table contains all 
passenger fees labelled as a ‘tax’, and all other charges and fees that are considered 
passenger taxes based on the definition provided above.  

2.5.1. Aviation taxes in Europe 

Figure 5 and 6 show the weighted average tax paid by passengers in Europe based on 
both international and domestic travel, and only international travel, as the taxes for 
domestic and international traffic generally differ strongly. The weighted average tax 
burden is calculated by combining the tax regimes per country with passenger booking 
data (PaxIS35). Some taxes, most notably VAT, are levied as a percentage of the air fare. 
The average VAT burden is determined by multiplying the average fare from PaxIS by 
the effective tax rate. Moreover, in some cases taxes differ by airport. This is for instance 
the case in Italy. For these cases, we first determined the total tax revenue per airport 
using passenger data from OAG Traffic Analyser36. Next, the average tax burden is 
determined by dividing the total revenue by the total number of passengers. For taxes 
which vary by booking class – such as the UK APD – we used the booking class 
distinction as provided by IATA PaxIS (Discount Economy, Full Economy, Other classes, 
Business class, First class), where Discount Economy refers to the ‘lowest class’.  

The tax level ranges from zero in 10 countries to an average of over € 40 per departing 
passenger in the UK. Other countries with ticket taxes – being Norway, Sweden, 
Germany, France, Austria and Italy – also have high average tax levels. Countries for 
which the only tax is the VAT on domestic flights have relatively lower average tax levels. 
For those countries where the only tax is the VAT, larger countries with a higher share of 
domestic traffic (e.g. Greece, Finland, and Spain), show higher values than countries with 
a smaller domestic market (e.g. Slovakia, Czech Republic and Latvia).  

35   See Chapter 3 for a description of PaxIS. 

36   The data provided by IATA contains only data at the country level. 

32 

 
 
 
 
 
 
 
 
 
 
                                                 
Figure 5 – Average aviation taxes per passenger in the EU and EFTA. Weighted average for domestic 
and international passengers 

The tax level ranges from zero in 10 countries to an average of over € 40 per departing 
passenger in the UK. Other countries with ticket taxes – being Norway, Sweden, 
Germany, France, Austria and Italy – also have high average tax levels. Countries for 
which the only tax is the VAT on domestic flights have relatively lower average tax levels. 
For those countries where the only tax is the VAT, larger countries with a higher share of 
domestic traffic (e.g. Greece, Finland, and Spain), show higher values than countries with 
a smaller domestic market (e.g. Slovakia, Czech Republic and Latvia).  

33 

 
 
 
 
 
Figure 6 presents taxes levied on international passengers. These include only ticket 
taxes, as international aviation is exempt from VAT. 

Figure 6 - Average aviation taxes per passenger in the EU and EFTA, for international passengers 

Figure 7 breaks down the average level of aviation taxes per departure between domestic 
and international flights. Slovakia levies the highest taxes for domestic flights. 
However, due to the low volume of domestic air travel in Slovakia, the country’s average 
tax burden is close to zero and aviation tax revenues are negligible. Taxes for 
international flights are highest for the United Kingdom. Countries which charge high VAT 
rates report a high tax burden for domestic flights. Examples are Slovakia (20%) and 
Germany (19%). Countries with a ticket tax have the highest tax burden for international 
flights. 

34 

 
 
 
 
 
 
Figure  7 – International  aviation taxes  are highest  in  the  UK;  Slovakia  levies the highest  domestic 
taxes 

Average tax per departure
€ 10 € 20 € 30 € 40 € 50

€ 0

Total revenue (x mln EUR)

€ 0

€ 5,000

Slovakia

Estonia

Germany

Czech Republic

Austria

France

Greece

Italy

Norway

Croatia

EU28

United Kingdom

Romania

Switzerland

Sweden

Latvia

Finland

Spain

Poland

Portugal

Slovakia

Estonia

Germany

Czech Republic

Austria

France

Greece

Italy

Norway

Croatia

EU28

United Kingdom

Romania

Switzerland

Sweden

Latvia

Finland

Spain

Poland

Portugal

Domestic

International

Domestic

International

Note:  European countries not mentioned in the figure do not apply aviation specific (indirect) taxes or apply a 

zero tax rate for certain taxes. Revenues depict total estimated ticket tax and VAT revenues based on 
PaxIS data. 

2.5.2. Aviation taxes outside Europe 

Outside Europe the level of airport taxes varies. Of the countries considered, Australia 
has the highest taxes, mainly resulting from the AUD60 (around € 40) international 
departure tax. In the US and Canada sales taxes are levied over air fares and passenger 
charges, for flights within North America (and Mexico for the US). In the US a US$ 18 
international departure tax is effective. Mexico and Brazil levy relatively high taxes on 
international passengers.  

Figure 8 compares the average tax burden of European airports against the average tax 
burden on a non-European countries. In line with the calculations provided for Europe in 
the previous paragraph, the average tax burden is derived by estimating the average 
tax revenue per passenger, accounting for different tax regimes for domestic and 
international passengers. Passenger booking data from OAG Traffic Analyser was used to 
derive average fares and the number of domestic and international passengers per 
country.  

35 

 
 
 
 
Figure 8 – Outside Europe, air travel taxes are highest in Australia 

Domestic and international flights

International flights

€ 0

United Kingdom
Italy
Norway
Germany
France
EU28
Sweden
Austria
Greece
Finland
Spain
Romania
Croatia
Slovakia
Poland
Portugal
Switzerland
Czech Republic
Latvia
Australia
Canada
United States
Hong Kong
Japan
Oman
Mexico
Armenia
Bahrain
Brazil
Qatar
Vietnam
United Arab Emirates
China
Indonesia
Kuwait
Singapore
Thailand
Malaysia

A
T
F
E
+
U
E

n
o
i
t
a
v
a

i

s
r
e
t
s
u
c

l

s
e
i
r
t
n
u
o
c
e
t
a
d
n
a
M

r
a

l
i

m
S

i

Average tax burden per passenger
€ 20

€ 10

€ 30

€ 40

r
a

l
i

m
S

i

Average tax burden per international passenger

€ 0

€ 10

€ 20

€ 30

€ 40

€ 50

A
T
F
E
+
U
E

n
o
i
t
a
v
a

i

s
r
e
t
s
u
c

l

s
e
i
r
t
n
u
o
c
e
t
a
d
n
a
M

United Kingdom
Italy
Germany
EU28
Sweden
France
Norway
Austria
Portugal
Australia
United States
Hong Kong
Mexico
Brazil
Oman
Armenia
Bahrain
China
Qatar
United Arab Emirates
Kuwait
Singapore
Thailand

Note:  Countries not mentioned in the figure do not apply aviation specific (indirect) taxes or apply a zero tax 

rate for certain taxes. 

Various airports outside Europe levy some sort of passenger based taxes, apart from the 
regular passenger service charge to be paid for using airport services. For instance in the 
Gulf region, Oman, Bahrein, Kuwait, Qatar and UAE all have an effective airport tax or 
charge, varying between € 6.27-21.76 per international passenger. It is difficult to define 
whether these levies should be categorised as charges or taxes based on ICAO’s 
definition. Various sources report that these taxes are used for airport infrastructure 
investment, and as such these should not be considered a tax37. The same holds for 
China’s airport fee, which is officially labelled as ‘airport construction fee’38. 

Figure 9 presents the range of ticket taxes levied in the considered countries, excluding 
VAT. As identified before, UK levies the highest passenger based tax, particularly for 
intercontinental business class passengers. The range of ticket taxes – excluding VAT 
rates – in other European and non-European countries varies between € 0-50 per 
passenger.  

37   http://gulfbusiness.com/qatar-becomes-latest-gcc-state-to-levy-airport-tax-on-passengers/; 

https://www.theguardian.com/world/2016/mar/31/passengers-using-dubai-airport-to-pay-new-tax 

38   http://www.ebeijing.gov.cn/QA/all_questions/t1068430.htm 

36 

 
 
 
 
 
 
 
                                                 
Figure 9 – Ticket tax rates in European and non-European countries 

140

160

180

166,4

Ticket tax range (EUR)
120
60

100

80

0

20

40

17,5

53,2

42,0

35,9

41,7

Austria

France

Germany

Italy

Sweden

United Kingdom

Norway

8,8

United States

15,0

Brazil

36,0

Hong Kong

12,9

Australia

Armenia

Bahrain

40,3

18,1

15,7

China

11,4

Kuwait

6,3

Mexico

Oman

Qatar

United Arab Emirates

23,5

21,8

9,3

8,0

Singapore

3,8

Thailand

0,8

Ticket tax

A
T
F
E
+
U
E

s
e
i
r
t
n
u
o
c
e
t
a
d
n
a
M

Note:  

Bars indicate range of ticket taxes. Labels indicate maximum values for all ticket taxes. 

Source: 

IATA TTBS, QPX Express API. 

2.6. Policies in the case of no-shows 

Airport charges and passenger taxes are levied on airlines based on the number of 
passengers and cargo carried. Therefore, in the event a passenger does not turn up for a 
flight, airlines are not billed for passenger charges and taxes. In general, airlines do not 
refund these charges, but only refund in case the passenger asks for it. In some cases, 
airlines charge an administrative fee for such refunds. 

There is no standard European policy or law which requires airlines to automatically 
refund taxes (and passenger based charges) for unused tickets. To date, France is the 
only country having a legislation in force in this respect. In France, a law was introduced 

37 

 
 
 
 
 
in November 2017 obliging airlines to reimburse taxes and charges of unused tickets39. 
This regards all taxes and charges that are related to the ‘effective boarding of the 
passenger’, i.e. costs that are not due in case a ticket is not used. The law obliges 
airlines to reimburse these fees within 30 days. For reimbursements filed online, no 
invoicing costs may be levied. For reimbursement demanded through other means, the 
reimbursement costs may not be higher that 20% of the reimbursable amount.  

Table 6 presents the reimbursement policies of some of the largest European airlines 
(together covering 37% of the seat capacity offered from European airports). All of these 
airlines do offer tax refunds on unused tickets, but terms and conditions are not always 
straightforward for passengers to find at airline’s websites. Moreover, the forms that are 
supposed to be used for these tax refunds are generally the same as those to be used for 
cancellations and other refund requests, for which they do not appear to apply to  
no-shows.  

Table 6 – Airline terms and conditions in case of no-shows 

Airline 

easyJet 

How? 

Cost and time 
limit 
Free; unlimited  By calling customer 

service 

Wizz Air 
Hungary 

- 

No refund of 
passenger-
based taxes 
and charges 

Norwegian 

Free; unlimited  By filling in a web form 

Terms and conditions/airline website 

Article 6.4: 'If after having made a booking you 
do not fly with us, whether or not a refund or 
credit to the value of the fare is payable, you 
will be entitled to claim a refund of any 
applicable APD payable by you in accordance 
with Article 5.2, which as a consequence we 
have no obligation to pay to any government 
or other authority on behalf of which we collect 
passenger duty.' 

Article 7.2.1: ‘The Fare generally includes 
taxes, fees and charges imposed by 
governments, other authorities or by airport 
operators on Wizz Air […]. Any taxes and 
charges imposed by an airport operator, even 
if they are based on the number of passengers, 
are not refundable. 

Article 5.3: ‘The applicable taxes and charges 
imposed by government authorities or airport 
authorities must be paid by you. If taxes or 
charges are abolished or reduced so that they 
no longer apply to your journey on the day of 
departure, you may claim for reimbursement 
by contacting us directly.’ 

Ryanair 

€ 20 or £ 17; 
1 month 

Article 12.5: ‘If according to the Fare Rules 
your Booking is non-refundable, the Carrier 
Imposed Surcharges will also be non-
refundable. You can however, apply for a 
refund of government taxes and charges for 
unused Bookings.’ 
By filling in a web form   Article 4.2.1: ‘If you do not travel, you may 
apply in writing within one month for a full 
refund of government taxes paid subject to the 
Government Tax Refund Administration Fee at 
the level set out in our Table of Fees. All other 
monies paid are non-refundable.’ 

According to the Table of Fees, this fee 
amounts € 20 or £ 17 

British 
Airways 

GBP15-30; 
none 

By filling in a web form 

In its section on Government taxes and fees 
and carrier charges: ‘Government and/or 

39  https://www.legifrancce.gouv.fr/affichCodeArticle.do?cidTexte= 

LEGITEXT000006069565&idArticle=LEGIARTI00003221627&dateTexte=&categorieLien=cid 

38 

 
 
 
 
                                                 
Airline 

Cost and time 
limit 

How? 

Terms and conditions/airline website 

airport taxes are refundable, however some 
countries will apply a Value Added Tax, Sales 
Tax or equivalent, which will only be refunded 
on fully flexible tickets.’ 

Lufthansa 

€ 30; 6 months  Via the ‘manage 

According to the airline’s FAQ:  

booking’ web portal  

By filling in a web form 

KLM 

Costs vary per 
ticket (US$ 30 
according to 
KLM US 
website; none 

By filling in a web form 

Air France 

Costs vary per 
ticket (free for 
tickets issued 
in France;  
US$ 30 
according to AF 
US website); 
12 months 

‘If you request a refund because you are 
voluntarily returning your ticket, you will 
receive a refund in accordance with the fare 
conditions. Taxes, fees and surcharges are, 
with the exception of the Ticket Service 
Charge, fully refundable, provided that no part 
of the ticket has been used. 

[…] 

Should a refund be possible, there may be a 
corresponding charge for this depending on the 
type of fare booked.’ 

According to ticket refund conditions: ‘In case 
you cancel your flight(s) for other reasons than 
those mentioned above and have a non-
refundable ticket, you can request a refund of 
unused airport tax. Booking fee, reissue fee 
and payment surcharges will not be refunded. 
Carrier imposed international surcharges will 
not be refunded if your ticket conditions do not 
allow a refund.’ 

According to General Conditions of Sale: 
‘Please note that if your ticket is not valid 
anymore and has not been used for 
transportation, you have a right to 
reimbursement of taxes as defined in our 
General Conditions of Carriage depending on 
your actual boarding. 

In order to be refunded of these amounts, you 
can submit your refund request directly online 
(free refund) in the section Review/modify your 
reservation.’ 

According to the General Conditions of 
Carriage: ‘Should the Passenger not travel on a 
flight for which they have a confirmed 
Reservation, the Passenger will benefit from a 
refund of said taxes, airport charges and other 
fees, payment of which is connected to actual 
boarding of the Passenger in accordance with 
the applicable regulations.’ 

39 

 
 
 
 
 
Estimate of total revenues associated with no-shows 

As airlines are not required to actively refund taxes (and passenger-based charges),  
no-shows may be a source of revenue. Estimating the total revenues associated with 
these no-shows is rather challenging. This would require data on the number of no-shows 
as well as the share of no-show passengers that request a refund. Ideally, this should be 
at the route level to identify the exact amount of taxes paid by these passengers. 
As these data consider rather business sensitive information, this information is not 
publicly available.  

There are however rough estimates available for the revenues associated with  
non-refunded airport taxes and charges. Airhelp for instance estimates these at between 
GBP 300 million for the UK over a 6 year period and at € 3.5 billion in Europe in 2012 
alone40. Others sources estimate these revenues at € 30,000 a day at Schiphol and 
€ 55,000 at London Heathrow41. These calculations include both airport charges and 
taxes. Moreover, the source of no-show rates and estimation procedures from the above 
estimates are unclear.  

In this paragraph we try to provide a more funded estimation, although it should be 
emphasised that this encapsulates a very rough estimate, based on available literature 
and expert assumptions, and not on actual airline data. The first step is to estimate an 
average no-show rate across the EU. Airlines themselves use sophisticated models to 
forecast no-show rates, using historical booking patterns. These estimates are used as 
inputs to their revenue management models, in order to determine the optimal level of 
overbooking: the practice of intentionally selling more seats than available, anticipating 
on no-shows, in order to achieve higher load factors and increase revenues. 

Many airlines have a policy to overbook their flights to prevent empty seats as a result of 
no-shows42. In the EU, passenger rights render airlines with high penalty costs for denied 
boarding, which acts as an incentive for airlines to be conservative in terms of 
overbooking. As a result, the number of passengers denied boarding due to overbooking 
is believed to be less than 1 in 10,000 in the EU (The Financial Times, 2017). In the US, 
according to BTS statistics43, 700 in 10,000 passengers could not board due to 
overbooking, mainly consisting of passengers voluntarily accepting a compensation to 
take a later flight. Only 0.6 in 10,000 passengers were denied boarding involuntarily in 
the US in 2016.  

Table 7 presents the rate of passengers not showing up for their flights according to 
various studies and surveys. Reportedly, the no-show rates vary between 0 and 25%, 
depending among others on market, airline and type of the route. Various sources report 
load factors from more than 10 years ago, however it remains unclear whether no-show 
rates have decreased or increased. The increase of online booking has made it easier for 
passengers to change or cancel bookings, which could have led to a decrease of no-show 
rates. On the other hand, the decrease of air fares and the rise of low-cost carrier travel 
could have increased no-show rates, as the costs of not showing up have decreased. 

40   https://www.aviation24.be/organisations/aci-europe/european-airports-respond-a4es-hollow-revelations/ 

http://www.mymoneyblog.com/airhelp-refund-me-airtaxback.html 

41   http://www.re-fund.com/how-to-get-an-airport-tax-refund-unused-ticket/  

42   In this respect, budget carrier Ryanair claims to be the only exception in Europe, not overbooking their 

flights (https://corporate.ryanair.com/about-us/passenger-charter/).  

43   The Bureau of Transportation Statistics (BTS) is a statistical agengy within the US Department of Transport 
(DOT). BTS collects data on passengers who were denied boarding, and presents how these passengers 
were compensated or offered alternative transportation (https://www.bts.gov/content/2016-report-
passengers-denied-confirmed-space-4th-quarter)  

40 

 
 
 
 
 
 
 
                                                 
Table 7 – Information on the share of no-shows 

No-show rate 

Description 

Source 

2.5-5% 

0-10% 

6% 

15-25% 

Estimated no-show rates using airline data of 
2001/2002, for passengers for which an e-ticket was 
issued.  

Laurie A. Garrow & Koppelman, 
2004 

For a numerical analysis of a model on the impact of 
overbooking, the show-up rate is set as a random 
variable uniformly distributed between 0.9 and 1. 

Guo, et al., 2016 

Global no-show rate of Air Canada, based on data for 
April 2009. 

Dupuis, et al., 2012 

In the United States, domestic airline no-show rates 
average 15–25% of final predeparture bookings. 

Barnhart, et al., 2003 

10% in 2001; 
4% in 2004 

The analysis of passenger no-show rates at 
Continental Airlines shows that they have decreased 
dramatically from around 10% in 2001 to 4% in 2004 
for Continental’s domestic network.  

Gorin, et al., 2006 

5% 

10% 

10% 

5-12% 

Used as a no-show parameter on a study on the 
viability of long-haul low-cost services: "[…] there is 
likely to be very few “no-show passengers”. An 
average of 5% of passengers appears reasonable for 
unexpected changes (passengers missing their flight, 
exceptional flight cancellations, etc.)."  

De Poret, et al., 2015 

Used as no-show parameter in a numerical study: 
"each passenger will independently become a  
no-show with probability p = 0.1". 

Lan, et al., 2015 

Mean no-show rate for over 15,000 Air Canada flights 
between January and July 2002. 

Lawrence, et al., 2003 

According to a survey by Gulf News. “The airlines, 
that responded to the survey, report that flights are 
overbooked from between 5-12%”. 

Gulf News, 2002 

4% (3 mln over 
a total of 
74.5 mln) 

According to an EasyJet spokesperson: “Last year, 
nearly 3 million easyJet customers didn’t show for 
their flights”.  

Independent, 2017  

Based on the numbers in the table above, we assume the no-show rate to be around 5%, 
in line with the numbers mentioned in the most recent studies and surveys. This also 
corresponds to the no-show rate for EasyJet in 2016. According to a spokesperson from 
the airline around 3 million (out of 74.5 million) passengers did not show up for their 
flight, amounting to around 4%. For network carriers, the no-show rate is likely to be 
slightly higher, due to a higher share of business travel and a higher share of connecting 
passengers. To incorporate a margin for uncertainty, we apply a lower boundary on the 
no-show rate of 2.5% and an upper boundary of 7.5%.  

In addition, information is required on the share of no-show passengers that do not 
apply for a refund. This strongly depends on the airline policy and on the passenger. 
As mentioned above such data is not publicly available. Therefore, assumptions are 
required. Passengers may be unaware of the fact that they are entitled to a refund on 
taxes (and passenger-based airport charges). In addition, we have seen above that some 
airlines are unclear on how to apply for these refunds, decreasing the likeliness that 
passengers apply for refunds. Moreover, the benefits of obtaining a refund may not 
outweigh the efforts required to apply for a refund. Based on these considerations, we 
assume that 25-75% of the no-show passengers do not apply for a refund. 
Although further research would be needed to narrow down this range, we are of the 
opinion that the higher value is probably closer to reality.  

41 

 
 
 
 
As a result, we find that the range of no-show passengers not applying for a refund is 
between 0.625% and 5.625% (2.5% * 25% = 0.625% to 7.5% * 75% = 5.625%) of the 
total number of air passengers in the EU will not claim back the taxes they have paid to 
airlines. Multiplying this by the total amount of taxes 44 paid by domestic and international 
air passengers in the EU in 2016, as identified from the analysis earlier in this chapter, 
yields the total amount of additional revenue generated by airlines through non-refunded 
taxes (see Figure 5 “International aviation taxes are highest in the UK; Slovakia levies 
the highest domestic taxes” for tax revenues of each Member State). Using the 
parameters defined above, we estimate these revenues to lie in the range of  
€ 50-€ 475 million per year in the EU (again, we are of the opinion that in reality, the 
higher values are more probable).  

44   Excluding VAT, as VAT cannot be claimed back by passengers. 

42 

 
 
                                                 
3. Modelling the Impacts of Aviation Taxes 

3.1. Introduction 

One of the aims of this study is to develop a simple, easily calculable and generally 
applicable methodology that stakeholders could use in the future in assessing the effects 
of the introduction, change or abolition of aviation taxes or aviation-specific tax 
exemptions. The model is described in this chapter will be programmed in a tool for the 
quantification of impacts. 

The model is a partial equilibrium model to analyse the impacts: because the tax or tax 
exemption affects the price of flying, the first impact is on the demand for aviation.  
The extent to which the demand is changed is given by the price elasticity of demand. 
The change in demand results in a change of supply, i.e. the number of flights changes 
and as a result the connectivity changes. This also has an impact on noise and emissions. 
The change in demand causes a change in output of the aviation sector which has an 
impact on direct and indirect jobs and value added. This impact is calculated by an  
input-output analysis. The change in fiscal revenue also has an impact on the output of 
other sectors, which has an impact on jobs and value added. Together, these impacts 
cause a change in GDP.  

Hence, the following impacts are modelled: 

1.  Passenger demand. 

2.  Change in the number of flights and connectivity. 

3.  Jobs (direct and indirect). 

4.  GDP. 

5.  Fiscal revenue from the aviation sector. 

6.  CO2 emissions. 

7.  Noise. 

Outputs are provided in relative terms and, where possible, in absolute terms.  

Figure 10 provides a graphical representation of the relations between the tax and the 
impacts. 

43 

 
 
 
 
 
 
Figure 10 – Model to estimate impacts 

Whilst this partial model does not take into account the second- and third-order effects in 
the economy brought about by changes in prices and disposable incomes, it has the great 
benefit of being transparent in the sense that the results can be easily traced back to the 
design of the tax. 

Note that the impact of taxes and tax exemptions on air cargo have  not been modelled 
because the data sources used do not contain information on air freight rates nor on price 
elasticities of demand for air freight. As reported in Chapter 2, most aviation taxes exempt 
air cargo, and most tax exemptions apply equally to cargo and passengers. 

The remainder of this chapter is devoted to the presentation and justification of the model 
and its input values. 

3.1.1. How the model can be applied 

The model is well suited to provide a first estimate of the most important impacts of the 
introduction or abolishment of an aviation tax or the abolishment of a tax exemption.  

The model favours transparency over mathematical detail. The results are traceable to 
the inputs, but in most cases, feedback loops that are present in the economy are not 
incorporated in the model. The model uses average airport charges per Member State, 
average ticket prices per category of consumers, and average estimates of environmental 
impacts. 

The model does not take airport or airspace congestion into account. Therefore, the 
results should be interpreted with caution when congested airports are analysed. If 
aviation demand is larger than supply, airports and/or airlines are able to reap scarcity 
rents. If taxes are introduced or increased in such a situation, ticket prices may not be 
affected (or to a lesser extent) because the taxes are paid from the scarcity rents. This 
means that the impact on demand, flights, connectivity and environment will be smaller 
than the results of the model show. CE Delft (2018) analyses such a situation. 

If an accurate estimate of, say, the impact of a ticket tax on noise exposure around a 
certain airport is required, additional analysis should be undertaken. 

44 

 
 
 
 
 
 
 
 
 
3.1.2. Treatment of fiscal revenues in the model 

One important choice that was made in the model is the view of the state in generating 
fiscal revenue. 

The change in aviation taxes can either be a revenue-neutral tax reform, or change the 
total fiscal revenue. 

In case of a revenue-neutral tax reform, modelling the GDP impacts as a net-zero 
impulse is logical. After all, taxes are shifted between different tax bases, but the total 
fiscal revenue does not change. In reality, the GDP and welfare impacts may depend on 
how the revenues are recycled (Patuelli et al., 2001; Bovenberg et al., 1993) (Ballard  
et al., 1985), but this is beyond the scope of the report. 

In case of a change in fiscal revenue, the impact on GDP depends on how the change 
affects the economy. This can be either: 

•  a change in public spending; or 

•  a change in the government deficit or surplus. 

In the former case, modelling the GDP impacts as a net-zero impulse makes sense 
because the change in public spending will change the output of economic sectors and 
thus value added (Ballard et al., 1985). 

In the latter case, impact on GDP is harder to determine. A lowering of fiscal revenue 
would require the government to borrow more, thus driving up interest rates and 
lowering investment and borrowing. At the same time, the fiscal stimulus would result in 
higher demand. The balance of these two counteracting factors is hard to determine.  
(An increase in fiscal revenue would have the opposite effect).  

However, when a change in taxation of the aviation sector results in a change of total 
fiscal revenues, the impacts of the change in taxes cannot be disentangled from the fiscal 
stimulus (in case taxes are lowered) or austerity (in case taxes are increased).  

Studies on environmental tax reform generally assume that environmental taxes are 
recycled (e.g. Ekins, 2007) (Conefry et al., 2008) (Williams et al., 2014). In studies 
specific to aviation taxes, some focus only on the impacts on the aviation sector (Fukui  
et al., 2017), others (mostly those commissioned by the aviation sector) have changes in 
taxation coincide with fiscal stimulus or austerity, yet others assume that taxes are 
rebated or fiscal revenue leads to higher government spending (Forsyth et al., 2014), 
while still others point to the welfare loss associated with leaving a sector untaxed  
(Keen et al., 2013).  

The studies that assume that taxes are rebated or lead to higher government revenues, 
generally conclude that the impacts of aviation taxes on employment an the environment 
are limited. In Sweden (Loman et al., 2016), the study found that employment would 
shift between sectors, but that the overall level of employment would hardly be affected. 
The economic impacts were assessed to be ‘limited’. An ex-post evaluation in Austria 
(IHS 2014) found it unlikely that there had been negative impacts of the Austrian tax.  
A study in the Netherlands (CE Delft, 2018) found that the overall impacts on GDP and 
employment on the whole economy would be positive. An exception is Scotland, where a 
study into halving the Air Passenger Tax indicated that the additional Gross Value added 
would be higher than the tax revenue foregone (Scottish Government, 2017). 
However, this study did not assume that the foregone fiscal revenues would somehow be 
compensated by higher other taxes or result in lower government spending. 

In summary, except in the case where environmental taxes are part of a fiscal stimulus 
or an austerity package, the right way to model their impact on GDP is to assume that 
simultaneous with the change in aviation taxes, either other taxes are changed, or 
government expenditures change. This report follows that path, which is one often taken 

45 

 
 
 
 
 
 
 
 
 
 
in the academic literature on tax reforms, and not uncommon to independent studies on 
aviation taxes. 
Therefore, the model regards the state as an entity that generates fiscal revenue which is 
entirely spent domestically. The model assumes that States balance their budgets,  
at least in the long term, or have constant deficits or surplusses. This means that the 
introduction of an aviation tax either prevents the increase of another tax, results in a 
decrease of other taxes or results in higher public expenditures (and conversely, the 
abolition of an aviation tax would result in lower public expenditures or higher taxes on 
other activities)45.  

This assumption is consistent with a view of the state as a revenue-neutral entity:  
it raises the taxes it needs to raise in order to provide the public expenditures that the 
electorate requires, while at the same time ensuring that the budget deficit or surplus 
does not exceed the level that the electorate requires.  

Note that the assumption does not necessarily assume that states have a balanced 
budget every year, neither that they balance their budget over the business cycle. 

The impacts of this assumption are discussed in more detail in Sections 3.5 and 4.11.  
In Section 3.5, the impacts of the decrease in aviation taxes and the impacts of the 
increase in other taxes or government expenditures are shown separately. Section 4.11 
compares the results of our study with the findings of a study which assumed that the 
abolition of a tax would coincide with a fiscal stimulus. 

3.1.2. Outline of the chapter 

Section 3.2 describes which data are used in the model. 
Section 3.3 presents the way in which passengers are grouped. 
Section 3.4 describes how the different types of taxes are modelled. 
Section 3.5 presents the mathematical modelling of the different impacts. 

3.2. Data inputs 

In this section we will describe the chosen base year, the steps taken to determine the 
final ticket price, as well as the steps needed to model the effect of the excise duty and 
VAT on tickets. While the data are provided for all 28 EU Member States, this section 
provides examples for Germany, since that country levies ticket taxes and VAT (only on 
domestic flights) and this way it provides a good example of how we have processed the 
data. 

3.2.1. Base year 

We report effects relative to values in the base year 2015.  

The base year should not be interpreted in the sense that the values we report for 
indicators in that year are the exact values for 2015. Rather, the values should be 
interpreted as approximations for values in years around 2015. This interpretation of the 
base year as indication for the time period, rather than an exact representation of it, 
reflects the uncertainty around the values we report. The uncertainty arises from 
unavoidable assumptions and approximations we have to make, such as that 
input/output coefficients, employment intensities and aviation demand elasticities are 

45   An alternative view could be that aviation taxes impact the budget surplus or deficit, which in turn impacts 

the interest rates in the economy. In this view, the introduction (abolition) of taxes would reduce 
(increase) the deficit, resulting in lower (higher) interest rates, which encourage (crowd out) investments 
in the economy, resulting in higher (lower) growth of other industries. This would, however, be harder to 
model in a simplified linear model. 

46 

 
 
 
 
 
                                                 
stable over time and that all fares are paid in the country of origin of the flight (a 
simplification with regards to transfer flights).  

These necessary assumptions and approximations imply we cannot report values with a 
precision that would justify further assumptions to report values for an exact base year. 
Instead, depending on the indicator, we report values for the most recent year depending 
on data availability after 2015. Our interpretation of the base year 2015 is that the 
reported values are good approximations of real values for years around 2015. 

3.2.2. Passenger volumes 

Passenger volumes were acquired from IATA for the period August 2016–July 2017, 
which was the most recent 12-month period at the start of data modelling. The use of 
IATA data was part of the Terms of reference of the project. The benefit of this 
datasource is that is provides a consistent set of passenger volume and air fare data. 

In order to compare the IATA passenger volume data with other data, a comparison with 
Eurostat was made. Eurostat provides data on the number of passengers per Member 
State based on data per airport for 201646.  

The Eurostat data did not exactly match the PaxIS data. There are a number of reasons 
for this: 

•  PaxIS data were obtained for the last 12 consecutive months before the start of 

the data modelling: August 2016–July 2017, while Eurostat data are reported per 
year or per month, but recent months are not yet available at the time of writing. 

•  Eurostat data are based on departing and arriving passengers per airport, 

including transfer passengers, while PaxIS data are based on tickets sold through 
the IATA’s BSP (Billing and Settlement Plan) system. The passenger numbers in 
PaxIS are adjusted for tickets sold by other airlines. 

Subsequently, PaxIS data were scaled to the Eurostat level as explained in Textbox 1. 

Textbox 1 

Passenger volume adjustment: 

1.  The IATA data consists of departing passengers while Eurostat’s airport data consists of the aggregated number 

of departing, arriving and transfer passengers. We firstly subtracted the number of transfer passengers from 

this data. The number of transfer passengers is known for most Member States, however for some it is not 

known at all (e.g. Bulgaria and Greece), or only for previous years (e.g. the UK up to 2013). We supplemented 

the transfer data with other sources as much as possible. For Greece we used the number of transfer 

passengers from Athens International Airport as a proxy for the number of transfer passengers in Greece 

(https://www.avialliance.com/avia_en/data/pdf/AIA_Annual_Report_2016.pdf) and for Luxembourg this was 

estimated at 0.4% of the total number of passengers (http://www.dlr.de/fw/Portaldata/42/Resources/ 

dokumente/paper/Maertens_Grimme_Transfer_Rate_estimation.pdf). For the UK we used the percentage of 

transfer passengers in 2013 based on Eurostat and assumed that this percentage also applies over 2016. For 

the other Member States (inter alia Bulgaria) no data was found hence we took the weighted average of 

transfer passengers from the Member States with available data (11%) and applied this to each Member State 

with lacking data. 

2.  The number of passengers (excluding transfer passengers) was then halved to approximate the number of 

departing passengers by assuming that the number of departing and arriving passengers is the same once we 

subtracted the number of transfer passengers. 

46   The Eurostat source we used was “Airport traffic data by reporting airport and airlines (avia_tf_apal)”. 
We decided to use this data source instead of the “Air passenger transport by reporting country 
(avia_paoc)” source as it is not clear how the number of transfer passengers relates to the latter data 
source. It is namely important to deduct the number of transfer passengers in order to produce a similar 
measurement with respect to the IATA data. 

47 

 
 
 
 
 
 
                                                 
In Table 8, a comparison is made between the IATA and Eurostat data for departing 
passengers in Germany. Eurostat data has been adjusted based on the steps highlighted 
in the Textbox 1. 

Table 8 – Comparison of data sources for departing passengers in Germany 

Data source 

IATA 

Eurostat 

Number of departing 
passengers 

Year 

87,331,309 

99,323,097 

August 2016-July 2017 

2016 

For Germany the IATA data is underestimated by around 14% relative to the Eurostat 
data. We will scale the IATA passenger data up with this factor (1.14) for Germany, and 
will likewise do so for the other Member States. 

3.2.3. Ticket prices 

The PaxIS data originates from IATA’s BSP system, which covers 180 countries and 400 
airlines, although it is not exhaustive. Not all airlines use BSP, and amongst those which 
do not, low-cost carriers dominate. IATA makes estimates for passenger volumes of 
airlines not using BSP but not for the average ticket price data. This means that IATA’s 
average ticket price data is an overestimation of the true average ticket price for intra-EU 
and domestic flights, since low-cost carriers predominantly fly on routes within the EU. 
For intercontinental flights this poses less of a problem. 

Despite the data gaps, IATA’s PaxIS database is the most comprehensive data on ticket 
prices available. QPX Express API (Section 2.3.2.) provided price data for single tickets 
but not averages. Statistics on e.g. tourism expenditures do not provide detailed 
disaggregation on destinations and flight class. By excluding some low-cost airlines, 
which predominantly fly on intra-EU routes, the largest deviation is likely to occur in the 
category of economy class passengers on intra-EU routes. In order to estimate the 
possible deviation in the data, we have compared the average fares for these passengers 
from the PaxIS database with the average fares of some of the largest low-cost carriers 
in Europe: Ryanair, easyJet and Wizz Air47 (other major low-cost carriers do not publish 
average fares).  

In the following table the average ticket price for German passengers departing for 
European or domestic destinations is given (based on IATA data) and compared with the 
average fares of some of the largest low-cost carriers in Europe. The low-cost average 
fares all included airport charges for single tickets, but excluded taxes such as VAT or 
ticket taxes. Therefore in order to make a like-for-like comparison with the IATA data, 
which initially excluded all charges and taxes for single tickets, the airport charges were 
included for the IATA data. 

In Table 9 it is clear that for our Economy class passenger group (see Section 3.3) the 
weighted average single ticket price for European and domestic destinations for Germany 
is significantly higher than those for the low-cost carriers: the latter range from around 
€ 45 to 65 per ticket, while the IATA data points to an average ticket price of € 101.  

47   https://centreforaviation.com/insights/analysis/europes-top-20-airline-groups-by-passengers- 

2017-lufthansa-wrests-top-spot-from-ryanair-394211 

48 

 
 
 
 
 
 
 
 
                                                 
Table 9 – Comparison of IATA PaxIS data on ticket prices for European economy flights with large 
low-cost carrier average fares 

Airline 

Average fare (€) 

Single ticket fare 
IATA Germany 
economy class  

Ryanair 

easyJet49 

Wizzair 51 

101 

46 

65 

45 

Average LCC fare 

53 

Year 

Source 

Number of 
departing 
passengers 
(million) 

August 2016 to 
July 2017 

IATA PaxIS data 

106 

73 

20 

2016 

2016 

2016 

2016 

Annual Report48  

Annual Report50 

Annual Report52 

Using the IATA data will therefore lead to an overestimation of the average ticket prices 
for European and domestic flights. We consequently adjusted the IATA ticket price for 
each Member State by using the share of low-cost carriers in passenger departures for 
each Member State (based on EUROCONTROL data53) with the weighted average ticket 
price of these three airlines (which is € 53). In 2016 approximately 30% of all European 
flights were flown by low-cost carriers54, however this varies strongly between Member 
States, with Germany having a share of around 33% of low-cost carriers in 2016 while 
Spain had around 55%. Assuming that the three airlines are representative for the 
average ticket price of low-cost carriers in Europe we are able to adjust the average 
ticket price per Member State for domestic and European flights using the following 
formula for Member State i:  

𝑨𝑨𝑨𝑨𝑨𝑨𝑨𝑨𝑨𝑨𝑨𝑨𝑨𝑨𝑨𝑨 𝒑𝒑𝒑𝒑𝒑𝒑𝒑𝒑𝑨𝑨𝒑𝒑 =   (𝑆𝑆ℎ𝑎𝑎𝑎𝑎𝑎𝑎 𝐿𝐿𝐿𝐿𝐿𝐿𝑖𝑖 ∗ # 𝑃𝑃𝑎𝑎𝑃𝑃 𝐼𝐼𝐼𝐼𝐼𝐼𝐼𝐼𝑖𝑖 ∗ 𝐼𝐼𝐴𝐴𝑎𝑎𝑎𝑎𝑎𝑎𝐴𝐴𝑎𝑎 𝑝𝑝𝑎𝑎𝑝𝑝𝑝𝑝𝑎𝑎 𝐿𝐿𝐿𝐿𝐿𝐿) + 
((1 − 𝑆𝑆ℎ𝑎𝑎𝑎𝑎𝑎𝑎 𝐿𝐿𝐿𝐿𝐿𝐿𝑖𝑖) ∗ # 𝑃𝑃𝑎𝑎𝑃𝑃 𝐼𝐼𝐼𝐼𝐼𝐼𝐼𝐼𝑖𝑖 ∗ 𝐼𝐼𝐴𝐴𝑎𝑎𝑎𝑎𝑎𝑎𝐴𝐴𝑎𝑎 𝑝𝑝𝑎𝑎𝑝𝑝𝑝𝑝𝑎𝑎 𝐼𝐼𝐼𝐼𝐼𝐼𝐼𝐼 𝑎𝑎𝑝𝑝𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒𝑒 𝑑𝑑𝑒𝑒𝑒𝑒𝑎𝑎𝑑𝑑𝑑𝑑𝑝𝑝𝑝𝑝 𝑎𝑎𝑒𝑒𝑑𝑑 𝐸𝐸𝐸𝐸𝑎𝑎𝑒𝑒𝑝𝑝𝑎𝑎𝑎𝑎𝑒𝑒𝑖𝑖)
BARE AVERAGE TICKET PRICE 
The average ticket prices are for departing passengers, however they do not include 
aviation taxes currently levied in the MS of departure, airport charges levied by the 
airport of departure, domestic VAT levied on domestic flights, nor the EU ETS certificates 
which airlines need to acquire for intra-EU flights. The IATA ticket prices, which we call 

48   https://investor.ryanair.com/wp-content/uploads/2016/07/Ryanair-Annual-Report-FY16.pdf  

49   easyJet does not publish the average fare in their annual report but rather the revenues per seat (£ 58.46), 

hence this acts as a proxy for the average fare. 

50   http://corporate.easyjet.com/~/media/Files/E/Easyjet/pdf/investors/result-center-investor/annual-report-

2016.pdf  

51   Wizzair also does not publish the average fare in their annual report but rather the average passenger ticket 

revenue, which also acts as a proxy for the average fare. 

52   https://cdn.static.wizzair.com/static/downloads/ipo/Wizz_Air_Holdings_Plc_Annual_report_ 

and_accounts_2016.pdf 

53   In EUROCONTROL’s STATFOR dashboard (http://www.eurocontrol.int/statfor) data on the number of flight 
departures per Member State is gathered amongst others for low-cost carriers, traditional scheduled and all-
cargo flights. Based on the data for 2016 we could determine the percentage of flight departures which were 
flown by low-cost carriers. 

54   http://www.eurocontrol.int/news/rapid-rise-low-cost-carriers  

49 

 
 
 
 
 
 
 
 
  
 
                                                 
the bare average ticket price, are similar to air fare as defined by the Commission in 
Article 2(18) of the Regulation 1008/200855. 

The consumer price however comprises the bare ticket price, airport charges and taxes 
where applicable. In order to complement the bare ticket price data with the taxes and 
charges levied in each MS we acquired IATA’s Aviation Charges Intelligence Centre 
(ACIC) database. This database covers the largest airports in each MS. Since the 
passenger volume and ticket data are given on a country-destination basis, we do not 
know from which airport passengers departed from in each MS. Eurostat has data on 
where passengers depart from in each MS which we used to pinpoint the airports of 
departure. The relevant airport charges used in our model per MS are described in the 
following textbox.  

Airport Charges per MS: 

• 

• 

For countries where there is one main airport (such as Austria, Czech Republic, Denmark, 
etc.), or where there is hardly any difference in rates with other major airports (such as 
Bulgaria), we used the rates of the largest airport. 

For countries where there are several large airports with different rates, a weighted 
average of the airport charges for the largest airports was determined. 

•  Discounts for children/students were not included, while different tariffs between Summer 

and Winter (e.g. Ireland) were averaged. 

The ticket taxes and airport charges are often differentiated into different groups 
according to the distance. Insofar as the differentiation coincides with our segmentation 
of passengers (domestic, intra-European and intercontinental, economy and premium 
class, see Section 3.3), we used the existing differentiation. Where the boundaries were 
different, we calculated weighted average ticket tax and airport charge per country 
destination and added this to the bare ticket price. Finally, we included the VAT rate 
levied on domestic flights where this is applied. 

We did not include the costs of purchasing EU ETS certificates for intra-EU flights in the 
ticket price since we do not know what the distribution is of these costs over 
Member States. Moreover, the costs are negligible. According to IATA56 these costs were 
€ 40 million in 2013 for all intra-EU flights. This is three orders of magnitude smaller than 
the revenues of airlines of intra-European flights originating in Germany alone, which 
were € 16.5 billion according to the PaxIS figures. 

FROM SINGLE TICKETS TO RETURN TICKETS 
The PaxIS database contains information on airline revenues for unidirectional flights. 
In reality, most passengers book return tickets. In order to adequately model some 
taxes, prices of return flights are needed. We therefore make the simplifying assumption 
that all departing passengers are return passengers, and that the average ticket prices 
should be doubled. This is a necessary simplification since we do not know if passengers 
departing from for instance Germany to the US are German nationals going on holiday to 
the US, US citizens returning from a holiday in Germany, or German nationals 
immigrating to the US.  

Since airport charges are levied in all countries, we assume that return flights will also 
include an airport charge for the return-leg of the flight. However since our airport 

55  

‘Air fares’ means the prices expressed in euro or in local currency to be paid to air carriers or their agents 
or other ticket sellers for the carriage of passengers on air services and any conditions under which those 
prices apply, including remuneration and conditions offered to agency and other auxiliary services 
(https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32008R1008&from=EN) 

56   https://www.iata.org/publications/economics/Reports/EUETS-cost-briefing-march-2013.pdf   

50 

 
 
 
 
 
 
 
 
 
 
                                                 
charges data only covers the EU+EFTA countries we assume that the airport charges of 
the return leg are equal to the airport charges of the outbound flight departing from the 
largest airport in the MS. Consequently, we doubled the airport charges per country-
destination for each MS. For flights that include a transfer, passengers also pay airport 
charges at the transfer airport. However, since the PaxIS data do not contain information 
on whether flights are direct or not, we do not include airport charges for transfer 
passengers in the ticket prices. This results in an underestimation of the average ticket 
price, especially on intercontinental flights where transfers are more likely to occur than 
on domestic or intra-European flights. 

Having combined the doubled bare average ticket price with the taxes and charges per 
MS as well as the VAT levied on domestic flights, we were able to aggregate the data to 
calculate the final average ticket price per MS. 

Table 10 provides an example of the aggregation needed to reach the final average ticket 
price for Germany for all return passengers. Note that the current ticket tax, the doubled 
airport charges and the VAT levied on domestic flights are the weighted averages for all 
German return passengers. In other words, the total VAT revenue levied on domestic 
tickets divided by the total number of passengers, both domestic and international, 
amounts to € 6 per passenger. 

Table 10 – Ticket price components for Germany 

Ticket price components 

Weighted average ticket price (doubled) 

Weighted average of airport charges (doubled) 

Weighted average of current ticket tax 

€ 259 

€ 44 

€ 13 

Weighted average of VAT (only levied on domestic flights) 

€ 6 

Final average ticket price 

€ 325 

3.2.4. Employment data 

Employment data were obtained from Eurostat’s National Accounts. The most recent year 
for which data on sector level is available is 2015. 

3.2.5. GDP data 

GDP data were obtained from Eurostat’s National Accounts. The most recent year for 
which data on sector level is available is 2015.  

3.3. Passenger groups 

The average ticket price and volume data per MS is further split into 5 classes of 
passengers by IATA: first, business, full economy, discount economy and other (which is 
predominantly a shuttle service with no reservation). We aggregated this data into two 
groups: a first and business class group, and an economy group consisting of full and 
discount economy, as well as the shuttle service group (group other). A fare adjustment 
is made for the economy passengers on intra-EU flights, to account for passengers flying 
with low-cost airlines (see Section 3.2.3.). 

In order to model the demand effects as accurately as possible we used elasticities which 
differentiated between business and economy class; and secondly which differentiated 
between domestic flights, European flights and intercontinental flights (see section 3.5.1. 
for these elasticities). This differentiation is presented in Table 11. 

51 

 
 
 
 
 
 
 
 
Table 11 – Passenger groups 

Geographic 
zone 

Domestic 

Europe 

Intercontinental 

Passenger 
group 

First/business 
class 

Economy 
class & 
other 
classes 

First/business 
class 

Economy 
class & 
other 
classes 

First/business 
class 

Economy class & 
other classes 

The model determines the change in passenger demand on the level of the type of 
passenger, of which there are 6 groups, as shown in the table above. After having 
calculated the demand effects per passenger group, these can be summed to give the 
total demand effect (see Section 3.3). 

3.4. Modelling taxes 

The model comprises three types of taxes: ticket taxes, value added taxes and excise 
duties on fuel. Each is modelled in a different way, as discussed in this section. 

In the base case, we assume that international flights are exempt from VAT and excise 
duties (see Chapter 2).  

3.4.1.  Ticket taxes 

The base case assumes that the ticket taxes are in place that were identified in  
Chapter 2. 

With regards to the ticket taxes we assume that they are only levied in the country of 
departure. This is the common practice with such taxes in both EU countries and other 
countries included in this study, as shown in Chapter 2. In contrast to VAT (as modelled 
in this study), they also apply to inbound passengers which pay the ticket tax on their 
return leg.  

3.4.2.  VAT 

In this study, VAT is modelled as an ad-valorem tax on the purchase of a ticket.  
The model contains the standard and reduced VAT rates of the Member States, as well as 
a zero rate. For example, for Germany these are: standard (19%), reduced (7%) and 
zero (0%). If the user of the model selects a non-zero VAT rate on domestic and/or 
international flights, VAT is levied over the final average ticket price including the current 
ticket taxes and airport charges. The final average ticket price also includes the VAT on 
domestic aviation tickets for countries which levy this. In effect we assume that airlines 
would pass on the VAT to passengers for 100%. 

When the exemption on VAT is abolished, we assume that VAT is charged on the entire 
value of the ticket in the country where the ticket is sold. So if Germany were to 
introduce VAT, it would be levied on e.g. a ticket to Spain that was sold in Germany, but 
not on a ticket from Spain to Germany that was sold in Spain. 

It should be noted that such a tax is not in line with the VAT Directive (2006/112/EC) 
which specifies that VAT can only be levied ‘where the transport takes place, 
proportionate to the distances covered’ (Article 48). This means that a VAT on a ticket 
from Member State A to neighbouring Member State B could under the present directive 
only be levied for a share of the ticket price proportional to the share of the distance 
flown in Member State A. Changing these rules would require a unanimous decision by 
the Council, which means a compromise that is rather challenging to reach among 

52 

 
  
  
  
 
 
 
 
 
 
Member States and therefore any change to VAT legislation is not realistic in the 
foreseeable future. 

Note that VAT on aviation is also studied in Case et al., (2014), alongside VAT on other 
modes of passenger transport. This study has employed a dynamic midel that shows that 
the introduction of VAT on aviation would slow down growth of aviation, but not result in 
an absolute reduction. 

Because the impact of a change in the VAT rate on ticket prices is calculated on the basis 
of the price of tickets sold in a country, the impacts on the number of passengers is 
overestimated when relatively many international transfer passengers use the airports in 
a country as a hub. This results on an overestimation of the impacts on the aviation 
sector, GDP and the number of flights, emissions and noise. 

3.4.3.  Excise duty 

As was discussed in Section 2.4.3., aircraft fuel is currently exempt from excise duties. 
The model can estimate the impacts of a removal of the exemption. It contains a 
standard rate of € 330 per 1,000 litres57 (which is the minimum rate in the Energy 
Taxation Directive 2003/96/EC for kerosene used in other sectors than aviation). 

Eurostat provides data available on kerosene sold per Member State from 2016 for 
international and domestic aviation. We however do not know the share of fuel consumed 
per passenger group. In order to estimate this, we firstly used the PaxIS revenue data to 
estimate the share of revenues per passenger group. The share of revenues acts as a 
proxy for the share in kerosene consumed per Member State since the further one flies, 
the higher the fuel costs, and hence the higher the revenue has to be of the flight 
relative to a shorter flight, all else equal. We can then estimate the fuel consumed per 
passenger group. If an excise duty is levied of € 330 per 1,000 litres, this will lead to a 
relative ticket price increase. 

When the exemption in excise duty is abolished, all the fuel sold to aviation in a 
Member State is subject to the excise duty. This affects both departing and arriving 
passengers, but only for one leg of their journey, viz. the leg that departs from the state 
which levies the excise duty. In principle, it also affects transfer passengers but since the 
PaxIS database does not contain information on the routing of passengers, we have not 
been able to model this impact. 

Because the impact of a change in the excise duty on ticket prices is calculated on the 
basis of the price of tickets sold in a country, while the fuel is used to carry origin 
destination58 passengers as well as transfer passengers and freight, the impact of an 
excise duty on ticket prices is overestimated when: 

• 

• 

relatively much fuel is used by full freighters; or 

relatively many international transfer passengers use the airports in a country as 
a hub. 

In those cases, changes of jobs in the aviation sector, GDP, flights, emissions and noise 
are overestimated. 

57   https://ec.europa.eu/taxation_customs/sites/taxation/files/resources/documents/taxation/excise 

_duties/energy_products/rates/excise_duties-part_ii_energy_products_en.pdf  

58   Passengers arriving or departing from that airport, as opposed to making a connection there. 

53 

 
 
 
 
 
 
 
                                                 
3.5. Impacts 

The impacts of taxes on the following parameters are modelled: 

1.  Passenger demand. 

2.  The number of flights and connectivity. 

3.  Jobs (direct and indirect). 

4.  GDP. 

5.  Fiscal revenue from the aviation sector. 

6.  CO2 emissions. 

7.  Noise. 

3.5.1.  Passenger demand 

The effect of a change in aviation tax on the passenger demand will depend on the level 
of the tax relative to the ticket price, how much of the tax is passed on in the ticket price 
and how price sensitive passengers are to an increase/decrease in prices. 

After determining the ticket price per MS for each of the groups of passengers we can 
determine the effect of a tax change on the number of return passengers. Three types of 
tax regimes can be changed: 

•  a ticket tax levied/abolished in the MS; 

•  abolishing/introducing the VAT-exemption on aviation tickets; 

•  abolishing the exemption of excise duty on aviation fuel. 

Note that these three types of tax can be chosen simultaneously in the model. In practice 
however the regimes are mostly levied separately: in the UK for instance the introduction 
of the Air Passenger Duty was partly a result of the exemption of VAT and fuel excise 
duties in the aviation sector (Seely, 2012 59).  

The cost pass-through rates depend on the market and the type of competition in the 
market. There is disagreement in the literature. For example, Koopmans and Lieshout 
(2005) argue on the basis of theoretical considerations and the assumption that aviation 
markets are Cournot-type oligopolies that the pass-through rate for airline-specific cost 
increases is less than 50%, whereas the pass-through rate for industry-wide cost 
increases is more than 50%. Vivid Economics (2007) argue that, depending on the 
elasticity of demand, and also assuming that aviation markets are Cournot-type 
oligopolies, pass through rates of more than 100% are possible. CE Delft (2007) argues 
that aviation markets show characteristics of Bertrand-type oligopolies (the profit 
margins do not suggest large oligopoly rents) and that therefore, the cost pass-through 
will be 100%. The model offers a choice between a 50 and 100% pass through rate. 

59   http://researchbriefings.files.parliament.uk/documents/SN00413/SN00413.pdf 

54 

 
 
 
 
 
                                                 
With respect to the price elasticity of demand60 we used Intervistas (2007) where a 
number of elasticities are provided. For the three main groups of passengers (Domestic, 
Europe and Intercontinental) we used the following national level elasticities for economy 
class passengers: 

1.  For Domestic flights we used the intra-Europe short-haul elasticity of -1.23. 

2.  For the European flights we used the intra-Europe long-haul elasticity of -1.12. 

3.  For the intercontinental flights we used the national elasticity of -0.8. 

Short-haul flights generally have a higher elasticity in absolute terms (i.e. lower) relative 
to long-haul flights since the likelihood of inter-modal substitution is greatest in case of a 
fare increase as the car or train can act as a substitute. For long-haul flights there are no 
alternative modes of transport, hence passengers are relatively less price sensitive. 

In order to correctly model the change in demand for first/business class passengers we 
modified the elasticities by using the business class dummy elasticity of Brons et al. 
(2001). The business class elasticity of 0.552 is presented in relation to that of the 
economy class elasticity: i.e. business class elasticities are 0.552 higher than economy 
class elasticities, all else equal, and are therefore less price sensitive. We assume that 
this relation has not changed over the years and that the relation is the same for first 
class passengers. We could then determine the business class elasticity in relation to the 
economy class elasticity for the main passenger groups. These elasticities are given for 
the different passenger groups in Table 12. 

Table 12 – Passenger groups and elasticities 

Geographic 
zone 

Domestic 

Europe 

Intercontinental 

Passenger 
group 

First/business 
class 

Economy 
class & 
other 
classes 

First/business 
class 

Economy 
class & 
other 
classes 

First/business 
class 

Economy 
class & 
other 
classes 

Elasticity 

-0.68 

-1.23 

-0.57 

-1.12 

-0.25 

-0.8 

After having determined the demand effect for each of these passenger groups, the 
demand effects were summed to give the total change in demand for the MS.  

It should be noted that our model does not include a modal shift when a tax increase 
depresses demand since this is beyond the scope of our study.  

3.5.2.  Change in number of flights and connectivity 

A change in aviation taxes will result in a change in passenger demand. This will lead to a 
change in the number of flights for a specific route since airlines may cancel some flights 
if the passenger load factor of the flight becomes below expected profit rates. A change 

60   A price elasticity of demand is the percentage change in the quantity demanded resulting from a 1% change 

in the price for a good or service. It reveals how price sensitive the demand is for a good or service. 

55 

 
 
 
 
  
  
  
 
 
 
                                                 
in the number of flights will also impact the connectivity of passengers, since this will 
impact the number of direct flights61. As connectivity and the number of flights are very 
similar we will treat them as one impact. 

In the model we assume that a 1% change in the passenger demand will lead to the 
same percentage change in the number of flights. At a city-pair basis, modelling the 
impact of changes on demand would require knowing the current passenger load factors, 
the importance of certain flights to airline networks and the route-specific price elasticity 
of demand. This information is not known. Moreover, our model does not have a city-pair 
as a unit of analysis, but rather demand for aviation to a country. At this aggregate level, 
it is justified to assume that the change in the number of flights will be proportional to 
the change in passengers.  

The model assumes that the number of flights will change proportionally for all 
designations. This means that the number of direct connections will change in proportion 
to the number of flights. 

3.5.3.  Jobs 

A change in aviation taxes will change demand for aviation and, as a result, the 
employment in the aviation sector. When demand for aviation is changed, the output of 
sectors that supply to the aviation sector (e.g. the fuel sector, catering, et cetera) also 
changes. 

Because of the revenues from aviation taxes are used for certain ends (e.g. to lower 
other taxes or prevent increases in other taxes, or to increase government expenditures) 
changes in aviation taxes also have employment effects in the wider economy. 

Hence, the total employment effects of changes in aviation taxes are the sum of: 

1.  The change in the number of direct jobs in the aviation sector based on Eurostat’s 

Passenger air transport services sector62. 

2.  The change in the number of indirect jobs from the major suppliers of the aviation 

sector. 

3.  The change in the number of indirect jobs from all sectors except aviation and its 

major suppliers.  

In a simplified model, we do not intend to take into account the following effects on 
employment: 

•  employment effects of tourism (sometimes also called ‘catalytic effects’), i.e. 

when as a result of the price increases, people do not spend money abroad on a 
vacation but rather domestically; and 

• 

forward employment effects (sometimes also called ‘induced employment’) as this 
would lead to double-counting. 

This study uses an input-output analysis to calculate the effect of a change in demand for 
aviation on the demand for products in other sectors, with corresponding effects on 
revenue and jobs. 

61   Connectivity is defined as the number of direct flights offered. 

62   http://ec.europa.eu/eurostat/ramon/nomenclatures/index.cfm?TargetUrl=LST_NOM_ 

DTL&StrNom=CPA_2_1&StrLanguageCode=EN&IntPcKey=33554372&StrLayoutCode=HIERARCHIC  

56 

 
 
 
 
 
 
 
 
 
                                                 
INPUT-OUTPUT ANALYSIS WITH A 0–NET DEMAND IMPULSE 
We model the effect of a rise in aviation taxes as a drop in demand for aviation services, 
with an offsetting rise in demand in other sectors. The rise in demand for the products 
and services of other sectors is based on the distribution of household consumption over 
these sectors 63. 

0-net demand impulse 

An important assumption in the analysis of the number of jobs and GDP is that governments aim to 
balance their budgets. Hence, when a tax is introduced or increased, the additional fiscal revenue is offset 
by a lowering of other taxes (or increasing government expenditures) by the same amount. 

The model does not make an assumption about which taxes are lowered in case an aviation tax is 
introduced, or which taxes are increased in case an aviation tax is increased. Rather, it assumes that the 
change in output of the aviation sector is offset by an increase in output of all other sectors combined by 
the same amount (but a different sign). In other words, if the output of the aviation sector is increased by 
€ 100 million because a tax is abolished, other taxes have to be increased so that the output of all other 
sectors in the economy is reduced by € 100 million. 

INPUT-OUTPUT ANALYSIS TO CALCULATE THE EFFECT OF CHANGES IN 
AVIATION TAXES ON REVENUE 
The input-output analysis uses Eurostat’s input-output tables. The tables provide the 
euro-values of products and services in 65 sectors. For these sectors, they report the 
values of (intermediate) products and services that are used in the production of 
products and services of other sectors as well as to meet final demand. Dividing the 
euro-values of intermediate products and services by total demand in the corresponding 
sector gives a coefficient for the value of intermediary production that is needed in an 
upstream sector to meet € 1 final demand for products in a downstream sector. 
With these coefficients, we calculated the effect of a tax-induced change in demand for 
airport services on revenue in all the other sectors64. 

If available, product-by-product tables are used65. For the remaining countries66, 
industry-by-industry tables were used. We have taken data for the year 2015, as this is 
the year with the most complete Eurostat data. 

63   This  approach  differs  from  the  method  in  Steer,  Davies  and  Gleave  (2015),  where  a  non-0  net-demand 
impulse is used. This explains to a large extent why the effects found in our study are smaller than those in 
Steer Davies and Gleave (2015). 

64   We  have  taken  values  for  the  long  term,  calculated  using  the  Leontief  inverse  of  the  matrix  with  I/O-
coefficients. However, we noticed that already three years after the change in airport taxes, the outcome is 
stable for most indicators. 

65   These were available for the countries Belgium, Bulgaria, Czech Republic, Germany, Estonia, Ireland, Greece, 
Spain, France, Italy, Cyprus, Latvia, Lithuania, Luxembourg, Hungary. Austria, Poland, Portugal, Slovenia, 
Slovakia, Sweden and the United Kingdom. 

66   These are: Denmark, Malta, Netherlands, Romania and Finland. 

57 

 
 
 
 
 
 
 
 
 
                                                 
FROM OUTPUT TO JOBS 
To calculate the amount of jobs, we multiplied the calculated effect of the aviation tax on 
sectoral revenue67 with the labour intensity of the respective sector. Labour intensity is 
calculated by dividing the sectoral revenue by the number of people employed in the 
sector. Data to calculate labour intensity were taken from Eurostat National Accounts, for 
the year 2015. Gaps in the labour intensity data for a number of combinations of 
countries and sectors, were filled based on the average labour intensity for the sector 
adjusted for the labour intensity of the country. 

We measure the effect on direct jobs as the change in jobs in the aviation sector, using 
the procedure above. With respect to the effect on indirect jobs this is measured as the 
difference between the economy-wide change in jobs and the change in direct jobs. 
Next, we single out changes in jobs in the upstream sectors that supply most 
intermediate goods and services to the aviation sector (warehousing and support services 
for transportation, rental and leasing services, travel agencies, tour operator and other 
reservation services and related services, repair and installation services of machinery 
and equipment, coke and refined petroleum products). Finally we calculate the total 
effect on jobs as the economy-wide change in jobs. 

3.5.4.  GDP 

The impact of changes in aviation demand on GDP can be calculated in two different 
ways. 

The first is to calculate the changes in value added related to the changes in 
employment. This has the advantage that the calculations are transparent and consistent 
with the changes in sectoral employment. The disadvantage, however, is that the effects 
on employment are temporary and that changes in productivity as a result of changes in 
aviation demand are not captured this way. 

The second way is to assess the impact of air links on productivity. Aviation enables the 
exchange of ideas and people, as well as regional specialisation and can have a positive 
impact on productivity. Key studies which have investigated this (Brueckner68, 2003; 
Green 69, 2007; Bilotkach70, 2015; SEO71, 2015; Campante and Yanagizawa-Drott72, 
2018) all found that there were positive effects of airports on regional economic 
development. The mentioned authors (except Campante and Yanagizawa-Drott, 2016 
and SEO, 2015) however all question whether the effects of airports on employment and 

67  

‘Output’ and ‘revenue’ are used interchangably in this report.  

68   According to Brueckner (2003) the effect of airline traffic on urban employment is positive with respect to 
the creation of service-related jobs, with a 10% increase in passenger enplanements in a metro area 
leading to a 1% increase in services-related employment. 

69   Green (2007) found that hub cities saw employment grow between 8.4% and 13.2% faster than in  

non-hub cities. 

70   Bilotkach (2015) uses panel data over 17 years to quantify the effects of, amongst others, connectivity, the 

number of flights and the number of passengers at US airports on employment, the average wage and the 
number of business establishments. For connectivity, which was defined as the number destinations of  
non-stop flights, a 10% increase would result in a 0.13% increase in employment, a 0.1% increase in the 
number of business establishments and a 0.2% increase in the average weekly wage. 

71   SEO (2015) found that countries which experience a 10% increase in passenger numbers have a 1.2% 

increase in GDP in the next year. 

72   Campante and Yanagizawa-Drott (2018) found that long-distance air links between cities result in higher 
local economic activity (measured in terms of night light). Air links between cities were also found to 
increase business links and capital flows, probably due to the possibilities for face-to-face contact over long 
distances. 

58 

 
 
 
 
                                                 
GDP are causal in their studies. In addition, Bogai et al. (2011)73 point out that many 
studies on the relation between aviation and regional economic development are 
inconclusive on the question whether regions with airports grow at the expense of 
regions without airports, or that aviation increases growth overall. Campante and 
Yanagizawa-Drott (2018) on the other hand do find a causal relationship between more 
air link connections and local economic development, and SEO (2015) found a causal link 
(amongst others) between passenger numbers and GDP per capita in the following year.  

Apart from the issue with causality, the main obstacle to this approach is that most 
studies either focus on the US or on small regional airports. Reliable studies on aviation-
related productivity changes in EU Member States are lacking. Undertaking such a study 
is beyond the scope of this project. 

METHOD TO ESTIMATE GDP EFFECT 
Because of the lack of relevant study results and the issue with causality, we propose to 
estimate the impact on GDP following the first method, i.e. the changes in value added in 
the aviation sector and other related sectors. After all, by definition the GDP is the sum 
of the gross value added by all sectors plus taxes minus subsidies on products. 
Because the model assumes that the change in aviation taxes will be offset by an 
equivalent change in other taxes, the overall level of taxes minus subsidies is constant 
and the impact on GDP can be calculated as the sum of changes in value added across all 
sectors of the economy. 

We calculated the effect on GDP starting from revenue, by multiplying revenue with a 
value-added fraction (percentage of revenue created by adding value). This fraction can 
be calculated from Eurostat’s input-output tables, by dividing value added by revenue. 
The change in value added is used to calculate the change in GDP. The effect on the 
value added within the aviation sector is calculated in a similar fashion, using sector 
specific values for the data on revenue and value-added. 

Differences with other impact studies 

Some other studies on the impacts of aviation taxes reach very different conclusions than this one.  
For example, PwC (2017)74 suggests that the GDP in Germany would increase by 0.11% and employment by 
almost 0.03% when aviation taxes would be abolished, while our model estimates a neglible effect on total 
employment and GDP. Although the PwC report does not provide a detailed explanation of the modelling 
approach, it appears that their model assumes that the reduction in fiscal revenue that results from the 
abolition of the aviation tax would not be offset by higher taxes in the rest of the economy. In other words, 
the PwC study seems to assume that the total fiscal revenue would be lowered. It also seems that the study 
does not assume that the consumption by public authorities would also be lowered. If this interpretation is 
correct, it seems that PwC assumes that Germany would introduce a fiscal stimulus. This means that part of 
the benefits of the PwC study are the result of a fiscal stimulus, rather than the result of the abolition of the 
aviation tax. 

In contrast, this report assumes that an abolition of the aviation tax would be offset completely by an 
increase in other taxes. i.e. there would not be a fiscal stimulus. In that respect, this report provides a more 
accurate picture of the impacts resulting from mere changes in aviation taxation, because the results are not 
convoluted with the effects of a fiscal stimulus. 

In Table 13 we disassociate the effect of the ticket tax change on GDP in case VAT on 
international tickets was levied in Germany (the relative effect is the same for jobs): on 
the one hand the VAT increase leads to a decrease in value added in the aviation sector 

73   https://link.springer.com/article/10.1007%2Fs10037-011-0049-7?LI=true 

74   https://a4e.eu/wp-content/uploads/2017/10/The-economic-impact-of-air-taxes-in-Europe-Germany-

004.pdf  

59 

 
 
 
 
 
 
 
 
 
 
                                                 
(Column 3), while on the other hand our assumption of a budget neutral tax increase 
means demand in other sectors increases for all goods/services (Column 4), leading to 
an increase in demand for the aviation sector. These effects are quantified for GDP in the 
following sectors: aviation, major aviation suppliers, all other sectors, and the total 
economy. The GDP effect for Germany is positive in this case as the demand increase of 
non-aviation related sectors outweighs the lower demand in the aviation-related sectors 
(based on the input-output tables explained above.  

Table 13 – Disassociated effects of introducing VAT on international tickets in Germany 

Introducing VAT on international tickets 

Total effect (∆ € mln)  Part caused by 

change in aviation 
demand (€ mln) 

Part caused by change 
in demand in other 
sectors (€ mln) 

Value Added aviation sector 

-873 

Value added in sectors that 
are major suppliers aviation 
sector 

-521 

-874 

-638 

1 

117 

Value added all sectors 
except aviation and its 
major suppliers  

2,147 

-6,185 

8,332 

GDP* 

837 

-8,549 

9,386 

*: The sum of value added gives the gross value added, which is equal to GDP plus taxes minus subsidies. 

3.5.5.  Fiscal revenue from the aviation sector 

Taxes raise fiscal revenue. As explained in Section 3.1.2., the model assumes that 
increases in taxation in one sector will be either offset by decreases in taxation in other 
sectors, in which case the net fiscal revenue is zero, or in changes in government 
expenditures. Still, the fiscal revenue of a change in taxation would be a relevant result 
of the model. 

In our model the fiscal revenues of the aviation sector are simply calculated by 
multiplying the number of passengers per passenger group (see Table 11) with the 
average tax per passenger group. Hereafter the fiscal revenues per group are summed to 
give the total fiscal revenues per Member State arising from the aviation sector. 
Similarly the demand change resulting from the change in the average tax per passenger 
group will allow us to determine the change in the total fiscal revenue per Member State. 

3.5.6.  CO2 emissions from the aviation sector 

Direct emissions from aviation account for about 3% of the EU’s total greenhouse gas 
emissions and while they have been stable in recent years, they are projected to increase 
further (CE Delft, 2016). The CO2 emissions resulting from international and domestic 
aviation bunkers per Member State are based on EEA CO2 emissions statistics for 2015 
(EEA, 2018). 

60 

 
 
 
 
 
 
 
A part of the aviation caused CO2 emissions is caused by cargo flights. The share of cargo 
flights of all flights in 2015 per Member State was collected from Eurocontrol data75, 
which acts as a proxy for the share of CO2 emissions per Member State caused by cargo 
flights. The share of CO2 emissions caused by cargo flights was subtracted from the CO2 
emissions from the aviation sector in each Member State leaving the CO2 emissions 
resulting from passenger transport. According to EEA (2017)76 the percentage of cargo 
flights in Europe was 3.5% of the total number of flights in 2015, however this share 
varies between 12% for Belgium and Luxembourg, to 1% for Portugal and Croatia. 

We assume that a 1% change in the number of flights will result in a 1% change in CO2 
emissions (in other words, it is assumed that the average distance flown and the aircraft 
types are not changed as a result of the change in taxation). 

3.5.7.  Noise 

An aviation tax has an impact on demand for aviation services, which has an impact on 
the number of flights that, in turn, affects the noise around airports. 

The relation between the number of flights and noise exposure is complex because of the 
fact that different aircraft types produce different amounts of noise, because of the 
logarithmic scale of noise and because the number of exposed people within certain noise 
bands may not be uniform. Hence, in order to calculate the change in noise exposure, 
ideally noise modelling would need to be performed. 
When modelling small changes in the number of flights, e.g. of a few percent at most, 
the noise exposure can be assumed to be linearly related to the number of flights, taking 
into account that noise is measured in dB, which is a logarithmic scale:  

Lden,new = Lden,old + 10 *log(Nnew/Nold),with N the number of flights. 

Moreover, if one assumes that the distribution of people within noise bands is uniform, 
one can model the change in the number of people exposed to noise as follows: 

For each noise band (e.g. 60-64 dB Lden), the number of people exposed is assumed to 
change linearly with the change of the noise level. If the number of flights and hence 
noise increases, people move to the next band (in this case, 65-69 dB Lden), if it 
decreases, people move to lower bands.  

The data of the number of people exposed to aviation noise within different Lden and 
Lnight bands is available from the European Environmental Agency77. The output of this 
module is the number of people exposed to aviation noise. 

75   In EUROCONTROL’s STATFOR dashboard (http://www.eurocontrol.int/statfor) data on the number of flight 
departures per Member State is gathered amongst others for low-cost carriers, traditional scheduled and  
all-cargo flights. Based on the data for 2015 we could determine the percentage of flight departures which 
were flown by all-cargo flights. 

76   https://ec.europa.eu/transport/sites/transport/files/european-aviation-environmental-report-2016-

72dpi.pdf  

77   https://www.eea.europa.eu/data-and-maps/data/data-on-noise-exposure-2  

61 

 
 
 
 
 
 
 
                                                 
4. Impacts of Aviation Taxes on EU Member 

States and the EU28 

In this section the effect of the change in the taxation regime will be presented for each 
of the impacts. The user of the model is able to vary the ticket tax, introduce a VAT on 
tickets or introduce a fuel excise duty on kerosene. To gauge the impacts, we change one 
taxation regime at a time, while not varying the other regimes and assume a 100% cost-
pass through (which can be varied in the Excel tool). We utilise the following scenarios: 

1.  Abolition or introduction of ticket tax. If a Member State already levies a ticket tax 
this scenario will determine the impacts when abolishing the ticket tax, while the 
current VAT and excise duty schemes are held constant. The majority of Member 
States do not levy a ticket tax, hence for these Member States this scenario will 
determine the impacts by introducing a ticket tax based on the German Air 
Transport Tax, while the current VAT and excise duty schemes are held constant. 
The weighted average ticket tax over all Member States, which in our model is the 
EU28’s average ticket tax, will be abolished in this scenario. The abolition of the 
ticket tax increases passenger demand, while an introduction of a ticket tax 
decreases it.  

2.  Introduction of VAT on international and/or domestic tickets. Some MS already 

levy VAT on domestic tickets. For these Member States the same VAT rate which 
applies to domestic flights will be levied on international flights. For the Member 
States which do not levy VAT on domestic flights the same VAT rate which is 
levied on other modes of international transport (bus or train) will be levied (see 
Annex D). The UK and Ireland do not levy any VAT on transport, so we used 
Germany’s VAT rate of 19% on domestic flights as a proxy. This is a purely 
arbitrary choice since we could have used another VAT rate which is applied in 
each country. The 19% VAT rate is also the VAT rate applied for determining the 
EU-wide impact of levying VAT on all tickets. As a result ticket prices are 
increased, leading to a fall in passenger demand. 

3.  Introduction of fuel excise duty. The minimum energy tax amounts to 

€ 330/kilolitre for kerosene, although the Energy Taxation Directive exempts 
aviation fuel.78 In this scenario, this rate is nevertheless applied to aviation fuels 
for all flights, while the current ticket tax and VAT levied on tickets are held 
constant. In effect ticket prices are increased, leading to a fall in passenger 
demand. 

It should be noted that some data inputs for a number of Member States are missing: 
Eurostat does not have recent input/output tables for Poland, Luxembourg or Malta, 
while the table for Croatia does not report the jobs or value added in the aviation sector. 
As a result, we could not determine the effects on jobs and value added of aviation taxes 
for these countries. There are also no data for the number of people exposed to noise 
pollution for Croatia, Cyprus, Estonia, Greece, Latvia, Malta and Slovenia. 

Lastly, the jobs data of the aviation sector, its major supplies and all other sectors do not 
always add up to the total jobs in the tables due to rounding off. 

78   Note that the Energy Taxation Directive permits EU Member States to impose a tax on aviation fuel used in 
domestic flights without limitation as well as on intra-EEA flights between Member States on the condition 
that the affected States have entered into a bilateral agreement to do so. 

62 

 
 
 
                                                 
4.1. Austria 

CURRENT TAX REGIME 
The ticket tax used in Austria is called the Air Transport Levy (Flugabgabe), and applies 
to departing passengers on board aircraft with a weight of more than 2,000 kg. 
Three destination bands have been defined, each with its own tax rate. See Table 14. 

Exempted from the ticket tax are transfer passengers continuing to another destination 
within 24 hours, and children below the age of two. 

Table 14 – Ticket tax rates in Austria 

Destination band 

Description 

Short haul 

To domestic destinations, European 
countries, Russia, and most North-African 
countries 

Tax rate 

€ 3.50 

Medium haul 

To the Middle East, other African countries, 
India and the United Arab Emirates 

€ 7.50 

Long haul 

To other destinations 

€ 17.50 

A VAT of 13% is levied in Austria on domestic flights. There is no excise duty on 
kerosene.  

IMPACTS 

The scenarios and the effect they have on the modelled impacts are presented in 
Table 15. 

Table 15 – Impacts per taxation scenario and change relative to the current situation for Austria 

Current 
situation 

Abolition of ticket tax 

Introducing VAT on all 
tickets (13%) 

Introducing fuel 
excise duty 

Impacts 

Value 

Value 

Change  Value 

Change  Value 

Change 

Aviation 
sector 

Passenger 
demand 
(million) 

Average ticket 
price (€) 

Number of 
flights and 
connectivity 

Employment 
(1,000 FTE) 

Value added 
(€ billion) 

CO2 emissions 
(Mton) 

People affected 
by noise 
(1,000) 

12.3 

12.5 

2% 

10.7 

-13% 

11.3 

-8% 

336 

331 

-2% 

380 

13% 

360 

8% 

2% 

-13% 

-8% 

8 

8 

2% 

7 

-14% 

7 

-9% 

0.8 

0.8 

2% 

0.7 

-14% 

0.7 

-9% 

2.1 

2.2 

2% 

1.9 

-13% 

2.0 

-8% 

30.7 

31.1 

1% 

27.3 

-11% 

28.7 

-7% 

63 

 
 
 
 
 
 
 
 
 
 
 
 
Current 
situation 

Abolition of ticket tax 

Introducing VAT on all 
tickets (13%) 

Introducing fuel 
excise duty 

0.1 

0.0 

-93% 

0.5 

667% 

0.3 

383% 

100 

100 

0% 

100 

0% 

100 

0% 

14 

14 

0% 

14 

0% 

14 

0% 

3,600 

3,600 

0% 

3,600 

0% 

3,600 

0% 

293 

293 

0% 

293 

0% 

293 

0% 

3,700 

3,700 

0% 

3,700 

0% 

3,700 

0% 

Aviation-related 
fiscal revenue 
(€ billion) 

Impacts on 
major 
suppliers 

Employment 
(1,000 FTE) 

Value added 
(€ billion) 

Impacts on all 
other sectors 

Employment 
(1,000 FTE) 

Value added 
(€ billion) 

Total 
economic 
impacts 

Employment 
(1,000 FTE) 

GDP (€ billion) 

344 

344 

-0% 

345 

0% 

345 

0%  

*: The sum of value added gives the gross value added, which is equal to GDP plus taxes minus subsidies. 

In the first scenario, the current ticket tax is abolished. This causes the average ticket 
price to decrease by 2%. As a result, both the number of passengers and the number of 
flights increase by 2%. In turn, the increase in passenger demand leads to an increase in 
both the number of direct jobs and in the value added of the aviation sector, which both 
rise by the same 2%. However, this is compensated by an almost equal decrease in jobs 
in other sectors of the economy, so the net effect on employment is close to zero.  
The fiscal revenue resulting from the ticket tax abolition is € 5 million (generated by the 
current VAT), compared to € 70 million in the current situation. With regard to climate 
and environmental impacts, the CO2 emissions also increase by 2%, and the number of 
people affected by noise by 1%. 

In the second scenario, the VAT rate of 13% that is currently levied to domestic flights 
applies to tickets for all destinations. As a result, the demand for flights by passengers 
and the number of flights decrease by 13% compared to the current situation. 
This results in a reduction of the number of direct jobs and the value added by the 
aviation sector of 14%, although the overall effect on jobs and GDP is negligible. 
The extension of the VAT to all flights results in a total fiscal revenue of € 607 million. 
The reduction in CO2 emissions is 13%, and the number of people affected by noise 
drops by 11%. Comparing these results with the first scenario, we can see that the 
relative effects of the VAT introduction are a factor seven larger than the (oppositely 
directed) effects of the ticket tax abolition. 

The introduction of a fuel excise duty of 330 €/kilolitre causes the average ticket price to 
increase by 8% compared to the current situation. The number of flights and passengers 
decline by 8%, as do the CO2 emissions. The fiscal revenue amounts to € 337 million. 
The relative reduction of the number of direct jobs and the value added by the aviation 
sector is 9% for both. The reduction in the number of people affected by noise of 7% is 
in line with the reduction of the number of flights. Thus, the impacts of this particular 

64 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
excise duty are found to be smaller than extending the VAT on air passenger tickets to all 
destinations, but still much higher than the (oppositely directed) impacts of the ticket tax 
abolition. 

4.2. Belgium 

CURRENT TAX REGIME 
Belgium levies no aviation taxes: neither a passenger ticket tax, nor a VAT on air tickets, 
nor an excise duty on kerosene.  

IMPACTS 

The scenarios and the effect they have on the modelled impacts are presented in 
Table 16. 

Table 16 – Impacts per taxation scenario and change relative to the current situation for Belgium 

Current 
situation 

Introduction of 
ticket tax 

Introducing VAT 
on all tickets (6%) 

Introducing fuel 
excise duty 

Impacts 

Value 

Value 

Change 

Value 

Change 

Value 

Change 

Aviation sector 

Passenger demand 
(million) 

Average ticket 
price (€) 

Number of flights 
and connectivity 

Employment 
(1,000 FTE) 

Value added 
(€ billion) 

CO2 emissions 
(Mton) 

People affected by 
noise (1,000) 

Aviation-related 
fiscal revenue 
(€ billion) 

Impacts on 
major suppliers 

Employment  
(1,000 FTE) 

Value added 
(€ billion) 

Impacts on all 
other sectors 

Employment  
(1,000 FTE) 

Value added 
(€ billion) 

13.0 

12.4 

-4% 

12.2 

-6% 

10.8 

-17% 

274 

286 

4% 

291 

6% 

316 

16% 

-4% 

-6% 

-17% 

6 

0.5 

3.7 

5 

-4% 

5 

-6% 

5 

-17% 

0.5 

-4% 

0.5 

-6% 

0.4 

-17% 

3.5 

-4% 

3.4 

-6% 

3.0 

-17% 

67.5 

65.5 

-3% 

64.7 

-4% 

59.3 

-12% 

0 

0.1 

>>100%  0.2 

>>100%  0.5 

>>100% 

100 

18 

100 

0% 

100 

0% 

100 

0% 

18 

0% 

18 

0% 

18 

0% 

3,700 

3,700 

0% 

3,700 

0% 

3,700 

0% 

349 

349 

0% 

349 

0% 

349 

0% 

65 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Current 
situation 

Introduction of 
ticket tax 

Introducing VAT 
on all tickets (6%) 

Introducing fuel 
excise duty 

3,800 

3,800 

0% 

3,800 

0% 

3,800 

0% 

Total economic 
impacts 

Employment  
(1,000 FTE) 

GDP (€ billion) 

410 

410 

 -0%  

410 

-0% 

410 

-0% 

*: The sum of value added gives the gross value added, which is equal to GDP plus taxes minus subsidies. 

In the first scenario, a ticket tax is introduced with the same structure and level as the 
German Air Transport Tax. Because most passengers fly to destinations within Europe in 
economy class and other classes, the average ticket price rises by a value that is close to 
the corresponding € 7.47 tax rate, which comes down to a 4% increase. As a result, both 
the number of passengers and the number of flights decrease by 4%. In turn, the 
decrease in passenger demand leads to a drop in both the number of direct jobs and in 
the value added of the aviation sector, which both fall by the same 4%. However, this is 
compensated by an almost equal increase in jobs in other sectors of the economy, so the 
net effect on employment is zero. The fiscal revenue resulting from the introduced ticket 
tax is € 142 million. With regard to climate and environmental impacts, the CO2 
emissions also decrease by 4%, and the number of people affected by noise by 3%. 

The VAT rate that is applied to the second scenario is based on the standard VAT rate on 
international transport tickets in Belgium, which is 6%. If this VAT rate were introduced 
on tickets for all destinations, the demand for flights by passengers and the resulting 
number of flights would decrease more than in the ticket tax scenario: by 6% (compared 
to 4%). This is caused by the higher average ticket price increase that the VAT brings 
about. This results in a larger reduction of the number of direct jobs and the value added 
by the aviation sector of 6%, although the overall effect on jobs and GDP is negligible. 
The introduction of the VAT creates a fiscal revenue of € 202 million. The reduction in 
CO2 emissions is larger than in the current situation (6%), and the number of people 
affected by noise drops by 4%. 

The strongest effects can be observed for the introduction of a fuel excise duty of 
330 €/kilolitre, which causes the average ticket price to increase by 16% compared to 
the current situation. The number of flights and passengers decline by 17% compared to 
the current situation as do the CO2 emissions. The fiscal revenue amounts to 
€ 450 million. The relative reduction of the number of direct jobs and the value added by 
the aviation sector is 17% for both. The reduction in the number of people affected by 
noise of 12% is in line with the reduction of the number of flights. 

66 

 
 
 
 
 
 
 
 
 
 
 
 
 
4.3. Bulgaria 

CURRENT TAX REGIME 
Bulgaria levies no aviation taxes: neither a passenger ticket tax, nor a VAT on air tickets, 
nor an excise duty on kerosene.  

IMPACTS 

The scenarios and the effect they have on the modelled impacts are presented in 
Table 17. 

Table 17 – Impacts per taxation scenario and change relative to the current situation for Bulgaria 

Current 
situation 

Introduction of 
ticket tax 

Introducing VAT on 
all tickets (20%) 

Introducing fuel 
excise duty 

Impacts 

Value 

Value 

Change 

Value 

Change 

Value 

Change 

Aviation sector 

Passenger demand 
(million) 

4.3 

4.1 

-5% 

3.3 

-21% 

3.8 

-11% 

Average ticket 
price (€) 

Number of flights 

Employment 
(1,000 FTE) 

Value added 
(€ billion) 

CO2 emissions 
(Mton) 

People affected by 
noise (1,000) 

Aviation-related 
fiscal revenue 
(€ billion) 

Impacts on 
major suppliers 

Employment 
(1,000 FTE) 

Value added 
(€ billion) 

Impacts on all 
other sectors 

Employment 
(1,000 FTE) 

Value added 
(€ billion) 

Total economic 
impacts 

Employment 
(1,000 FTE) 

211 

220 

4% 

253 

20% 

231 

10% 

2 

0.1 

0.6 

-5% 

-5% 

2 

-21% 

2 

-22% 

2 

-11% 

-11% 

0.1 

-5% 

0.1 

-22% 

0.1 

-11% 

0.5 

-5% 

0.4 

-21% 

0.5 

-11% 

105.6 

103.4 

-2% 

94.7 

-10% 

100.5 

-5% 

0 

0.04 

>>100%  0.1 

>>100%  0.1 

>>100% 

100 

100 

0% 

100 

0% 

100 

0% 

1 

1 

0% 

1 

0% 

1 

0% 

2,500 

2,500 

0% 

2,500 

0% 

2,500 

0% 

38 

38 

0% 

38 

0% 

38 

0% 

2,500 

2,500 

0% 

2,500 

0% 

2,500 

0% 

GDP (€ billion) 

45 

45 

-0% 

45 

-0% 

45 

-0% 

67 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
In the first scenario, a ticket tax is introduced with the same structure and level as the 
German Air Transport Tax. Because most passengers fly to destinations within Europe in 
economy class and other classes, the average ticket price rises by a value that is close to 
the corresponding € 7.47 tax rate, which comes down to a 4% increase. As a result, both 
the number of passengers and the number of flights decrease by 5%. In turn, the 
decrease in passenger demand leads to a drop in both the number of direct jobs and in 
the value added of the aviation sector, which both fall by the same 5%. However, this is 
compensated by an almost equal increase in jobs in other sectors of the economy, so the 
net effect on employment is close to zero. The fiscal revenue resulting from the 
introduced ticket tax is € 38 million. With regard to climate and environmental impacts, 
the CO2 emissions also decrease by 5%, and the number of people affected by noise by 
2%. 

The VAT rate that is applied to the second scenario is based on the standard VAT rate on 
international transport tickets in Bulgaria, which is 20%. If this VAT rate were introduced 
on tickets for all destinations, the demand for flights by passengers and the resulting 
number of flights would decrease much more than in the ticket tax scenario: by 21% 
(compared to 5%). This is caused by the higher average ticket price increase that the 
VAT brings about. This results in a larger reduction of the number of direct jobs and the 
value added by the aviation sector of 22%, although the overall effect on jobs and GDP is 
negligible. The introduction of the VAT creates a fiscal revenue of 144 million euro. 
The reduction in CO2 emissions is 21%, and the number of people affected by noise 
drops by 10%. 

The introduction of a fuel excise duty of 330 €/kilolitre causes the average ticket price to 
increase by 10% compared to the current situation. The number of flights and 
passengers decline by 11%, as do the CO2 emissions. The fiscal revenue amounts to 
€ 78 million. The relative reduction of the number of direct jobs and the value added by 
the aviation sector is 11% for both. The reduction in the number of people affected by 
noise of 5% is in line with the reduction of the number of flights. Thus, the impacts of 
this particular excise duty are found to be twice as small as for the introduction of a VAT 
of 20% on all air passenger tickets, but twice as high as for the introduction of the ticket 
tax. 

4.4. Croatia 

CURRENT TAX REGIME 
Croatia does not impose a ticket tax on air passengers. The country levies a VAT of 25% 
on domestic flights, but no excise duty on kerosene. 

IMPACTS 

The scenarios and the effect they have on the modelled impacts are presented in 
Table 18. 

Table 18 – Impacts per taxation scenario and change relative to the current situation for Croatia 

Current 
situation 

Introduction of 
ticket tax 

Introducing VAT on 
all tickets (25%) 

Introducing fuel excise 
duty 

Impacts 

Value 

Value 

Change 

Value 

Change 

Value 

Change 

Passenger 
demand 
(million) 

Average ticket 
price (€) 

Number of 
flights 

3.9 

3.7 

-4% 

2.9 

-25% 

3.7 

-6% 

263 

273 

4% 

326 

23% 

276 

5% 

-4% 

-25% 

-6% 

68 

 
 
 
 
 
 
 
 
 
 
Current 
situation 

Introduction of 
ticket tax 

Introducing VAT on 
all tickets (25%) 

Introducing fuel excise 
duty 

Employment 
(1,000 FTE) 

Not 
available 

Not 
available 

Value added 
(€ billion) 

Not 
available 

Not 
available 

- 

- 

Not 
available 

Not 
available 

- 

- 

Not 
available 

Not 
available 

- 

- 

0.4 

0.4 

-4% 

0.3 

-25% 

0.4 

-6% 

Not 
available 

Not 
available 

- 

Not 
available 

- 

Not 
available 

- 

0 

0.05 

>>100% 

0.2 

>>100% 

0.06 

>>100% 

CO2 emissions 
(Mton) 

People affected 
by noise 
(1,000) 

Aviation-related 
fiscal revenue 
(€ billion) 

Impacts on 
major 
suppliers 

Employment 
(1,000 FTE) 

Not 
available 

Not 
available 

Value added 
(€ billion) 

Not 
available 

Not 
available 

Impacts on all 
other sectors 

Employment 
(1,000 FTE) 

Not 
available 

Not 
available 

Value added 
(€ billion) 

Not 
available 

Not 
available 

- 

- 

- 

- 

Not 
available 

Not 
available 

Not 
available 

Not 
available 

- 

- 

- 

- 

Not 
available 

Not 
available 

Not 
available 

Not 
available 

- 

- 

- 

- 

*: The sum of value added gives the gross value added, which is equal to GDP plus taxes minus subsidies. 

It must be noted that Croatia has not reported the number of jobs or value added in the 
aviation sector. Therefore, the corresponding impacts could not be estimated.  

In the first scenario, a ticket tax is introduced with the same structure and level as the 
German Air Transport Tax. Because most passengers fly to destinations within Europe in 
economy class and other classes, the average ticket price rises by a value that is close to 
the corresponding € 7.47 tax rate, which comes down to a 4% increase. As a result, both 
the number of passengers and the number of flights decrease by 4%. The fiscal revenue 
resulting from the introduced ticket tax is € 46 million (€ 38 million more than in the 
current situation). With regard to climate and environmental impacts, the CO2 emissions 
also decrease by 4% (data on noise exposure are lacking). 

In the second scenario, the VAT rate of 25% that is currently levied to domestic flights 
applies to tickets for all destinations. As a result, the demand for flights by passengers 
and the number of flights decrease by 25% compared to the current situation. 
This decrease is a factor six higher than for the ticket tax, which is caused by the much 
higher average ticket price increase that the VAT brings about. The extension of the VAT 
to all flights results in a total fiscal revenue of € 186 million. The reduction in CO2 
emissions is 25%. 

The introduction of a fuel excise duty of 330 €/kilolitre causes the average ticket price to 
increase by 5% compared to the current situation. The number of flights and passengers 
decline by 6%, as do the CO2 emissions. The fiscal revenue amounts to € 56 million. 
Thus, the impacts of this particular excise duty are found to be much smaller than 

69 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
extending the VAT on air passenger tickets to all destinations, and slightly higher than 
the introduction of the ticket tax. 

4.5. Cyprus 

CURRENT TAX REGIME 
Cyprus levies no aviation taxes: neither a passenger ticket tax, nor a VAT on air tickets, 
nor an excise duty on kerosene.  

IMPACTS 

The scenarios and the effect they have on the modelled impacts are presented in 
Table 19. 

Table 19 – Impacts per taxation scenario and change relative to the current situation for Cyprus 

Current 
situation 

Introduction of 
ticket tax 

Introducing VAT on 
all tickets (9%) 

Introducing fuel 
excise duty 

Impacts 

Value 

Value 

Change 

Value 

Change 

Value 

Change 

Aviation sector 

Passenger 
demand (million) 

Average ticket 
price (€) 

Number of flights 
and connectivity 

Employment 
(1,000 FTE) 

Value added 
(€ billion) 

CO2 emissions 
(Mton) 

4.5 

4.3 

-4% 

4.1 

-9% 

4.0 

-10% 

252 

262 

4% 

275 

9% 

276 

10% 

-4% 

-9% 

-10% 

0.08 

0.08 

-4% 

0.07 

-9% 

0.07 

-11% 

0.002 

0.002 

-4% 

0.002 

-9% 

0.002 

-11% 

0.7 

0.7 

-4% 

0.7 

-9% 

0.7 

-10% 

People affected 
by noise (1,000) 

Not 
available 

Not 
available 

- 

Not 
available 

- 

Not 
available 

- 

Aviation-related 
fiscal revenue 
(€ billion) 

Impacts on 
major 
suppliers 

Employment 
(1,000 FTE) 

Value added 
(€ billion) 

Impacts on all 
other sectors 

Employment 
(1,000 FTE) 

Value added 
(€ billion) 

0 

0.041 

>>100%  0.093 

>>100%  0.09 

>>100% 

12 

1 

12 

1 

0% 

12 

0% 

12 

0% 

0% 

1 

0% 

1 

0% 

312 

311 

0% 

311 

0% 

311 

0% 

15 

15 

0% 

15 

0% 

15 

0% 

70 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Current 
situation 

Introduction of 
ticket tax 

Introducing VAT on 
all tickets (9%) 

Introducing fuel 
excise duty 

324 

324 

0% 

323 

0% 

323 

0% 

Total economic 
impacts 

Employment 
(1,000 FTE) 

GDP (€ billion) 

18 

18 

-0% 

18 

-0% 

18 

-0% 

*: The sum of value added gives the gross value added, which is equal to GDP plus taxes minus subsidies. 

In the first scenario, a ticket tax is introduced with the same structure and level as the 
German Air Transport Tax. Because most passengers fly to destinations within Europe in 
economy class and other classes, the average ticket price rises by a value that is close to 
the corresponding € 7.47 tax rate, which comes down to a 4% increase. As a result, both 
the number of passengers and the number of flights decrease by 4%. In turn, the 
decrease in passenger demand leads to a drop in both the number of direct jobs and in 
the value added of the aviation sector, which both fall by the same 4%. However, this is 
compensated by an almost equal increase in jobs in other sectors of the economy, so the 
net effect on employment is close to zero. The fiscal revenue resulting from the 
introduced ticket tax is € 41 million. With regard to climate and environmental impacts, 
the CO2 emissions also decrease by 4% (data on noise exposure are lacking). 

The VAT rate that is applied to the second scenario is based on the standard VAT rate on 
international transport tickets in Cyprus, which is 9%. If this VAT rate were introduced on 
tickets for all destinations, the demand for flights by passengers and the resulting 
number of flights would decrease more than in the ticket tax scenario: by 9% (compared 
to 4%). This is caused by the higher average ticket price increase that the VAT brings 
about. This results in a larger reduction of the number of direct jobs and the value added 
by the aviation sector of 9%, although the overall effect on jobs and GDP is negligible. 
The introduction of the VAT results in a total fiscal revenue of € 93 million. The reduction 
in CO2 emissions is 9%. 

The introduction of a fuel excise duty of 330 €/kilolitre causes the average ticket price 
to increase by 10% compared to the current situation. The number of flights and 
passengers decline by 10%, as do the CO2 emissions. The fiscal revenue amounts to 
€ 93 million, exactly the same as for the VAT scenario. The relative reduction of the 
number of direct jobs and the value added by the aviation sector is 11% for both. 
Thus, the impacts of this particular excise duty are found to be very similar to those of 
the VAT on air passenger tickets. 

4.6. Czech Republic 

CURRENT TAX REGIME 
The Czech Republic does not impose a ticket tax on air passengers. The country levies a 
VAT of 15% on domestic flights, but no excise duty on kerosene. 

IMPACTS 

The scenarios and the effect they have on the modelled impacts are presented in  
Table 20. 

Table 20 – Impacts per taxation scenario and change relative to the current situation for Cyprus 

Current 
situation 

Introduction of 
ticket tax 

Introducing VAT 
on all tickets 
(15%) 

Introducing fuel 
excise duty 

Impacts 

Value 

Value 

Change 

Value 

Change 

Value 

Change 

71 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Current 
situation 

Introduction of 
ticket tax 

Introducing VAT 
on all tickets 
(15%) 

Introducing fuel 
excise duty 

Aviation sector 

Passenger demand 
(million) 

6.8 

Average ticket price 
(€) 

266 

6.4 

-5% 

5.7 

-15% 

6.2 

-8% 

280 

5% 

306 

15% 

286 

8% 

-5% 

-15% 

-8% 

Number of flights 
and connectivity 

Employment  
(1,000 FTE) 

Value added 
(€ billion) 

CO2 emissions 
(Mton) 

People affected by 
noise (1,000) 

Aviation-related 
fiscal revenue 
(€ billion) 

Impacts on major 
suppliers 

Employment  
(1,000 FTE) 

Value added 
(€ billion) 

Impacts on all 
other sectors 

Employment  
(1,000 FTE) 

Value added 
(€ billion) 

Total economic 
impacts 

Employment  
(1,000 FTE) 

2 

0.1 

0.9 

2 

-5% 

2 

-16% 

2 

-8% 

0.1 

-5% 

0.1 

-16% 

0.1 

-8% 

0.8 

-5% 

0.7 

-15% 

0.8 

-8% 

11.3 

10.9 

-3% 

10.1 

-10% 

10.7 

-5% 

0.0 

0.1 

>>100%  0.2 

>>100%  0.1 

>>100% 

100 

100 

0% 

100 

0% 

100 

0% 

6 

6 

0% 

6 

0% 

6 

0% 

4,300 

4,300 

0% 

4,300 

0% 

4,300 

0% 

146 

146 

0% 

146 

0% 

146 

0% 

4,400 

4,400 

0% 

4,400 

0% 

4,400 

0% 

GDP (€ billion) 

168 

168 

-0% 

168 

-0% 

168 

-0% 

*: The sum of value added gives the gross value added, which is equal to GDP plus taxes minus subsidies. 

In the first scenario, a ticket tax is introduced with the same structure and level as the 
German Air Transport Tax. Because most passengers fly to destinations within Europe in 
economy class and other classes, the average ticket price rises by a value that is close to 
the corresponding € 7.47 tax rate, which comes down to a 5% increase. As a result, both 
the number of passengers and the number of flights decrease by 5%. In turn, the 
decrease in passenger demand leads to a drop in both the number of direct jobs and in 
the value added of the aviation sector, which both fall by the same 5%. However, this is 
compensated by an almost equal increase in jobs in other sectors of the economy, so the 
net effect on employment is close to zero. The fiscal revenue resulting from the 
introduced ticket tax is € 85 million. With regard to climate and environmental impacts, 

72 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
the CO2 emissions also decrease by 5%, and the number of people affected by noise by 
3%. 

In the second scenario, the VAT rate of 15% that is currently levied to domestic flights 
applies to tickets for all destinations. As a result, the demand for flights by passengers 
and the number of flights decrease by 15% compared to the current situation. 
This decrease is a factor three higher than for the ticket tax, which is caused by the 
higher average ticket price increase that the VAT brings about. It also leads to a larger 
reduction of the number of direct jobs and the value added by the aviation sector of 
16%, although the overall effect on jobs and GDP is negligible. The extension of the VAT 
to all flights results in a total fiscal revenue of € 234 million. The reduction in CO2 
emissions is 15%, and the number of people affected by noise drops by 10%. 

The introduction of a fuel excise duty of 330 €/kilolitre causes the average ticket price to 
increase by 8% compared to the current situation. The number of flights and passengers 
decline by 8%, as do the CO2 emissions. The fiscal revenue amounts to € 123 million. 
The relative reduction of the number of direct jobs and the value added by the aviation 
sector is 8% for both. The reduction in the number of people affected by noise of 5% is 
in line with the reduction of the number of flights. Thus, the impacts of this particular 
excise duty are found to be twice as small as for extending the VAT on air passenger 
tickets to all destinations, but a bit higher than for the introduction of the ticket tax. 

4.7. Denmark 

CURRENT TAX REGIME 
Denmark levies no aviation taxes: neither a passenger ticket tax, nor a VAT on air 
tickets, nor an excise duty on kerosene.  

IMPACTS 

The scenarios and the effect they have on the modelled impacts are presented in  
Table 21. 

Table 21 – Impacts per taxation scenario and change relative to the current situation for Denmark 

Current 
situation 

Introduction of 
ticket tax 

Introducing VAT 
on all tickets 
(25%) 

Introducing fuel 
excise duty 

Impacts 

Value 

Value 

Change 

Value 

Change 

Value 

Change 

Aviation sector 

Passenger demand 
(million) 

Average ticket 
price (€) 

Number of flights 
and connectivity 

Employment  
(1,000 FTE) 

Value added 
(€ billion) 

CO2 emissions 
(Mton) 

People affected by 
noise (1,000) 

14.1 

13.6 

-4% 

10.4 

-26% 

12.8 

-9% 

312 

324 

4% 

390 

25% 

338 

9% 

-4% 

-26% 

-9% 

5 

0.7 

2.7 

3.9 

5 

-4% 

4 

-26% 

5 

-9% 

0.7 

-4% 

0.5 

-26% 

0.6 

-9% 

2.6 

-4% 

2.0 

-26% 

2.4 

-9% 

3.8 

-2% 

3.2 

-18% 

3.7 

-6% 

73 

 
 
 
 
 
 
 
 
 
 
Current 
situation 

Introduction of 
ticket tax 

Introducing VAT 
on all tickets 
(25%) 

Introducing fuel 
excise duty 

0 

0.2 

>>100%  0.8 

>>100%  0.3 

>>100% 

100 

100 

0% 

100 

-1% 

100 

0% 

6 

6 

0% 

6 

-1% 

6 

0% 

Aviation-related 
fiscal revenue 
(€ billion) 

Impacts on 
major suppliers 

Employment  
(1,000 FTE) 

Value added 
(€ billion) 

Impacts on all 
other sectors 

Employment  

2,600 

2,600 

0% 

2,600 

0% 

2,600 

0% 

(1,000 FTE) 

Value added 
(€ billion) 

Total economic 
impacts 

Employment  
(1,000 FTE) 

229 

229 

0% 

229 

0% 

229 

0% 

2,700 

2,700 

0% 

2,700 

0% 

2,700 

0% 

GDP (€ billion) 

272 

272 

0% 

272 

0% 

272 

0% 

*: The sum of value added gives the gross value added, which is equal to GDP plus taxes minus subsidies. 

In the first scenario, a ticket tax is introduced with the same structure and level as the 
German Air Transport Tax. Because most passengers fly to destinations within Europe in 
economy class and other classes, the average ticket price rises by a value that is close to 
the corresponding € 7.47 tax rate, which comes down to a 4% increase. As a result, both 
the number of passengers and the number of flights decrease by 4%. In turn, the 
decrease in passenger demand leads to a drop in both the number of direct jobs and in 
the value added of the aviation sector, which both fall by the same 4%. However, this is 
compensated by an almost equal increase in jobs in other sectors of the economy, so the 
net effect on employment is close to zero. The fiscal revenue resulting from the 
introduced ticket tax is € 171 million. With regard to climate and environmental impacts, 
the CO2 emissions also decrease by 4%, and the number of people affected by noise by 
2%. 

The VAT rate that is applied to the second scenario is based on the standard VAT rate 
on international transport tickets in Denmark, which is 25%. If this VAT rate were 
introduced on tickets for all destinations, the demand for flights by passengers and the 
resulting number of flights would decrease much more than in the ticket tax scenario: by 
26% (compared to 4%). This is caused by the higher average ticket price increase that 
the VAT brings about. This results in a larger reduction of the number of direct jobs and 
the value added by the aviation sector of 26%, although the overall effect on jobs and 
GDP is negligible. The introduction of the VAT results in a total fiscal revenue of € 842 
million. The reduction in CO2 emissions is 26%, and the number of people affected by 
noise drops by 18%. 

The introduction of a fuel excise duty of 330 €/kilolitre causes the average ticket price to 
increase by 9% compared to the current situation. The number of flights and passengers 
decline by 9%, as do the CO2 emissions. The fiscal revenue amounts to € 335 million. 
The relative reduction of the number of direct jobs and the value added by the aviation 

74 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
sector is 9% for both. The reduction in the number of people affected by noise of 6% is 
in line with the reduction of the number of flights. Thus, the impacts of this particular 
excise duty are found to be three times smaller than for the VAT on air passenger tickets, 
but still two times higher than for the ticket tax scenario. 

4.8. Estonia 

CURRENT TAX REGIME 
Estonia does not impose a ticket tax on air passengers. The country levies a VAT of 20% 
on domestic flights, but no excise duty on kerosene. 

IMPACTS 

The scenarios and the effect they have on the modelled impacts are presented in  
Table 22. 

Table 22 – Impacts per taxation scenario and change relative to the current situation for Estonia 

Current 
situation 

Introduction of 
ticket tax 

Introducing VAT on 
all tickets (20%) 

Introducing fuel 
excise duty 

Impacts 

Value 

Value 

Change 

Value 

Change 

Value 

Change 

Aviation sector 

Passenger demand 
(million) 

Average ticket price 
(€) 

Number of flights and 
connectivity 

Employment  
(1,000 FTE) 

1.1 

1.0 

-5% 

0.9 

-21% 

1.1 

-4% 

222 

232 

4% 

266 

20% 

229 

3% 

-5% 

-21% 

-4% 

0.29 

0.27 

-5% 

0.22 

-22% 

0.27 

-4% 

Value added (€ billion) 

0.021 

0.020 

-5% 

0.017 

-22% 

0.021 

-4% 

CO2 emissions (Mton) 

0.1 

People affected by 
noise (1,000) 

n.a. 

0.1 

n.a. 

-5% 

n.a. 

0.1 

-21% 

0.1 

-4% 

n.a. 

n.a. 

n.a. 

n.a. 

Aviation-related fiscal 
revenue (€ billion) 

Impacts on major 
suppliers 

Employment  
(1,000 FTE) 

0.0 

0.01 

>>100% 

0.04 

>>100% 

0.01 

>>100% 

19 

19 

0% 

19 

-1% 

19 

0% 

Value added (€ billion) 

1 

1 

0% 

1 

-1% 

1 

0% 

Impacts on all other 
sectors 

Employment  
(1,000 FTE) 

546 

546 

0% 

546 

0% 

546 

0% 

Value added (€ billion) 

17 

17 

0% 

17 

0% 

17 

0% 

Total economic 
impacts 

Employment  
(1,000 FTE) 

565 

565 

0% 

564 

0% 

565 

0% 

75 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Current 
situation 

Introduction of 
ticket tax 

Introducing VAT on 
all tickets (20%) 

Introducing fuel 
excise duty 

GDP (€ billion) 

20 

20 

-0%  

20 

-0%  

20 

-0%  

*: The sum of value added gives the gross value added, which is equal to GDP plus taxes minus subsidies. 
In the first scenario, a ticket tax is introduced with the same structure and level as the 
German Air Transport Tax. Because most passengers fly to destinations within Europe in 
economy class and other classes, the average ticket price rises by a value that is close to 
the corresponding € 7.47 tax rate, which comes down to a 4% increase. As a result, both 
the number of passengers and the number of flights decrease by 5%. In turn, the 
decrease in passenger demand leads to a drop in both the number of direct jobs and in 
the value added of the aviation sector, which both fall by the same 5%. However, this is 
compensated by an almost equal increase in jobs in other sectors of the economy, so the 
net effect on employment is close to zero. The fiscal revenue resulting from the 
introduced ticket tax is € 10 million. With regard to climate and environmental impacts, 
the CO2 emissions also decrease by 5% (data on noise exposure are lacking). 

In the second scenario, the VAT rate of 20% that is currently levied to domestic flights 
applies to tickets for all destinations. As a result, the demand for flights by passengers 
and the number of flights decrease by 22% compared to the current situation.  
This decrease is a factor four higher than for the ticket tax, which is caused by the higher 
average ticket price increase that the VAT brings about. It also leads to a larger reduction 
of the number of direct jobs and the value added by the aviation sector of 22%, although 
the overall effect on jobs and GDP is negligible. The extension of the VAT to all flights 
results in a total fiscal revenue of € 39 million. The reduction in CO2 emissions is 21%. 

The introduction of a fuel excise duty of 330 €/kilolitre causes the average ticket price to 
increase by 3% compared to the current situation. The number of flights and passengers 
decline by 4%, as do the CO2 emissions. The fiscal revenue amounts to € 8 million. 
The relative reduction of the number of direct jobs and the value added by the aviation 
sector is 4% for both. Thus, the impacts of this particular excise duty are found to be 
similar to those of the introduction of the ticket tax, but much smaller than for extending 
the VAT on air passenger tickets to all destinations. 

4.9. Finland 

CURRENT TAX REGIME 
Finland does not impose a ticket tax on air passengers. The country levies a VAT of 10% 
on domestic flights, but no excise duty on kerosene. 

IMPACTS 

The scenarios and the effect they have on the modelled impacts are presented in  
Table 23. 

Table 23 – Impacts per taxation scenario and change relative to the current situation for Estonia 

Current 
situation 

Introduction of 
ticket tax 

Introducing VAT 
on all tickets 
(10%) 

Introducing fuel 
excise duty 

Impacts 

Value 

Value 

Change  Value 

Change  Value 

Change 

Aviation sector 

Passenger demand 
(million) 

9.1 

Average ticket price 
(€) 

281 

8.7 

-4% 

8.4 

-8% 

8.0 

-12% 

292 

4% 

304 

7% 

310 

11% 

76 

 
 
 
 
 
 
 
Current 
situation 

Introduction of 
ticket tax 

Introducing VAT 
on all tickets 
(10%) 

Introducing fuel 
excise duty 

-4% 

-8% 

-12% 

4 

0.6 

2.1 

4 

-4% 

4 

-8% 

4 

-12% 

0.6 

-4% 

0.5 

-8% 

0.5 

-12% 

2.0 

-4% 

1.9 

-8% 

1.8 

-12% 

14.7 

14.2 

-3% 

13.8 

-6% 

13.3 

-10% 

0.0 

0.1 

255% 

0.2 

513% 

0.3 

606% 

100 

100 

0% 

100 

0% 

100 

-1% 

5 

5 

0% 

5 

0% 

5 

0% 

2,100 

2,100 

0% 

2,100 

0% 

2,100 

0% 

175 

175 

0% 

175 

0% 

175 

0% 

2,200 

2,200 

0% 

2,200 

0% 

2,200 

0% 

Number of flights 
and connectivity 

Employment  
(1,000 FTE) 

Value added 
(€ billion) 

CO2 emissions 
(Mton) 

People affected by 
noise (1,000) 

Aviation-related 
fiscal revenue 
(€ billion) 

Impacts on major 
suppliers 

Employment  
(1,000 FTE) 

Value added 
(€ billion) 

Impacts on all 
other sectors 

Employment  
(1,000 FTE) 

Value added 
(€ billion) 

Total economic 
impacts 

Employment  
(1,000 FTE) 

GDP (€ billion) 

210 

210 

0% 

210 

0% 

210 

0% 

*: The sum of value added gives the gross value added, which is equal to GDP plus taxes minus subsidies. 

In the first scenario, a ticket tax is introduced with the same structure and level as the 
German Air Transport Tax. Because most passengers fly to destinations within Europe in 
economy class and other classes, the average ticket price rises by a value that is close to 
the corresponding € 7.47 tax rate, which comes down to a 4% increase. As a result, both 
the number of passengers and the number of flights decrease by 4%. In turn, the 
decrease in passenger demand leads to a drop in both the number of direct jobs and in 
the value added of the aviation sector, which both fall by the same 4%. However, this is 
compensated by an almost equal increase in jobs in other sectors of the economy, so the 
net effect on employment is close to zero. The fiscal revenue resulting from the 
introduced ticket tax is € 134 million (compared to € 38 million in the current situation). 
With regard to climate and environmental impacts, the CO2 emissions also decrease by 
4%, and the number of people affected by noise by 3%. 

In the second scenario, the VAT rate of 10% that is currently levied to domestic flights 
applies to tickets for all destinations. As a result, the demand for flights by passengers 
and the number of flights decrease by 8% compared to the current situation. 

77 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
This decrease is a factor two higher than for the ticket tax, which is caused by the higher 
average ticket price increase that the VAT brings about. It also leads to a larger reduction 
of the number of direct jobs and the value added by the aviation sector of 8%, although 
the overall effect on jobs and GDP is negligible. The extension of the VAT to all flights 
results in a total fiscal revenue of € 231 million. The reduction in CO2 emissions is 8%, 
and the number of people affected by noise drops by 6%. 

The strongest effects can be observed for the introduction of a fuel excise duty of 
330 €/kilolitre, which causes the average ticket price to increase by 11% compared to 
the current situation. The number of flights and passengers decline by 12%, as do the 
CO2 emissions. The fiscal revenue amounts to € 267 million. The relative reduction of the 
number of direct jobs and the value added by the aviation sector is 12% for both. The 
reduction in the number of people affected by noise of 10% is in line with the reduction 
of the number of flights.  

4.10. France 

CURRENT TAX REGIME 
France charges two types of ticket tax to each individual air passenger. The French Civil 
Aviation Tax includes two destination bands, and an additional fee per tonne of freight. 
The French Solidarity Tax distinguishes between destinations and classes of travel.  
This tax is levied for the purpose of development aid worldwide. Furthermore, air 
passengers to/from Corsica pay a Fiscal Tax, however this was not included in our model 
since we do not know from which French passengers departed from in France.  
See Table 24. Children below the age of two are exempted from the ticket tax. 

Table 24 – Ticket tax rates in France 

Ticket tax type 

Tax rate description 

Tax rate 

Civil Aviation Tax 

To EU & EEA countries, Switzerland and French overseas 

€ 4.48 

To all other destinations 

Per tonne of freight (all destinations) 

Air Passenger Solidarity Tax 

To EU & EEA countries, Switzerland and French overseas, 
in economy class 

€ 8.06 

€ 1.33 

€ 1.13 

To EU & EEA countries, Switzerland and French overseas, 
in business/first class 

€ 11.27 

To other countries, in economy class 

To other countries, in business/first class 

Fiscal Tax - Corsica 

Applied to all passengers embarking and disembarking in 
Corsica 

€ 4.51 

€ 45.07 

€ 4.57 

France levies a VAT of 10% on domestic flights. This VAT is also charged on the Civil 
Aviation Tax and the Air Passenger Solidarity Tax. There is no excise duty on kerosene. 

IMPACTS 

The scenarios and the effect they have on the modelled impacts are presented in 
Table 25. 

78 

 
 
 
 
 
 
 
 
Table 25 – Impacts per taxation scenario and change relative to the current situation for France 

Current 
situation 

Abolition of ticket 
tax 

Introducing VAT 
on all tickets 
(10%) 

Introducing fuel 
excise duty 

Impacts 

Value 

Value 

Change  Value 

Change  Value 

Change 

Aviation sector 

Passenger demand 
(million) 

81.5 

83.9 

3% 

75.9 

-7% 

74.1 

-9% 

Average ticket price 
(€) 

381 

372 

-3% 

411 

7% 

412 

9% 

Number of flights 
and connectivity 

Employment  
(1,000 FTE) 

Value added 
(€ billion) 

CO2 emissions 
(Mton) 

People affected by 
noise (1,000) 

Aviation-related 
fiscal revenue 
(€ billion) 

Impacts on major 
suppliers 

Employment  
(1,000 FTE) 

Value added 
(€ billion) 

Impacts on all 
other sectors 

Employment  
(1,000 FTE) 

Value added 
(€ billion) 

Total economic 
impacts 

Employment  
(1,000 FTE) 

3% 

-7% 

-9% 

63 

8.7 

65 

3% 

58 

-7% 

57 

-10% 

9.0 

3% 

8.1 

-7% 

7.9 

-10% 

21.1 

21.7 

3% 

19.6 

-7% 

19.2 

-9% 

20.6 

21.1 

2% 

19.4 

-6% 

19.1 

-7% 

1.3 

0.6 

-55% 

3.6 

164% 

3.5 

160% 

700 

92 

700 

0% 

700 

0% 

700 

0% 

92 

0% 

92 

0% 

92 

0% 

23,800 

23,800 

0% 

23,800 

0% 

23,800 

0% 

1,863 

1,863 

0% 

1,863 

0% 

1,863 

0% 

24,600 

24,600 

0% 

24,600 

0% 

24,600 

0% 

GDP (€ billion) 

2,194 

2,194 

0% 

2,194 

-0% 

2,194 

-0% 

*: The sum of value added gives the gross value added, which is equal to GDP plus taxes minus subsidies. 

In the first scenario, the current ticket taxes are abolished. This causes the average 
ticket price to decrease by 3%. As a result, both the number of passengers and the 
number of flights increase by 3%. In turn, the increase in passenger demand leads to an 
increase in both the number of direct jobs and in the value added of the aviation sector, 
which both rise by the same 3%. However, this is compensated by an almost equal 
decrease in jobs in other sectors of the economy, so the net effect on employment is 
close to zero. The fiscal revenue resulting from the ticket tax abolition is € 605 million 

79 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(generated with the current VAT on air tickets), which is much lower than the € 1,347 
million in the current situation. With regard to climate and environmental impacts, the 
CO2 emissions also increase by 3%, and the number of people affected by noise by 2%. 

In the second scenario, the VAT rate of 10% that is currently levied to domestic flights 
applies to tickets for all destinations. As a result, the demand for flights by passengers 
and the number of flights decrease by 7% compared to the current situation. This results 
in a reduction of the number of direct jobs and the value added by the aviation sector of 
7%, although the overall effect on jobs and GDP is negligible. The fiscal revenue 
increases to € 3,555 million, due to the extension of the VAT to all flights. The reduction 
in CO2 emissions is 7%, and the number of people affected by noise drops by 6%. 
Comparing these results with the first scenario, we can see that the (oppositely directed) 
effects of the VAT introduction are a factor two to three higher than the effects of the 
ticket tax abolition. 

The strongest effects can be observed for the introduction of a fuel excise duty of 
330 €/kilolitre, which causes the average ticket price to increase by 9% compared to the 
current situation. The number of flights and passengers decline by 9%, as do the CO2 
emissions. The fiscal revenue amounts to € 3,506 million. The relative reduction of the 
number of direct jobs and the value added by the aviation sector is 10% for both. 
The reduction in the number of people affected by noise of 7% is in line with the 
reduction of the number of flights.  

4.11. Germany 

CURRENT TAX REGIME 
Germany currently levies a ticket tax on departing passengers: the German Air Transport 
Tax (Luftverkehrsteuer). The tax rate is differentiated according to the distance of the 
destination, as summarised below. The amount levied per passenger depends on the 
distance of the biggest commercial airport in the country of destination from Germany’s 
largest airport, Frankfurt am Main. These countries are divided into three destination 
bands79: 

•  Annex 1 countries include the EU and EFTA Member States, domestic flights, EU 
candidate countries and Turkey, Russia, Morocco, Tunisia and Algeria, which are 
taxed at € 7.47 per passenger.  

•  Annex 2 countries are those not listed in Annex 1 and with a distance of not more 

than 6,000 kilometres, which includes countries in North and Central Africa, 
Middle East and Central Asia, which are taxed at € 23.32 per passenger.  

•  The rest of the countries not in Annex 1 or 2 are charged at € 41.99 per 

passenger. 

Table 26 – Ticket tax groups in Germany 

Tax groups 

Example country 

Tax rate 

Annex 1 

Annex 2 

Rest 

Belgium, Russia 

Qatar, Ghana 

US, South Africa 

€ 7.47 

€ 23.32 

€ 41.99 

See also Table 26. The full list of countries in destination bands Annex 1 and 2 is given in 
Annex C. 

79   http://www.fccaviation.com/regulation/germany/aviation-tax  

80 

 
 
 
 
 
 
 
                                                 
Some types of passengers are exempted from the ticket tax, such as children below the 
age of two. Furthermore, transfer passengers with a transfer under twelve hours for 
Annex 1 countries and with a transfer under 24 hours for Annex 2 countries do not need 
to pay a ticket tax. Passengers in flights serving military, state authority or medical 
purposes are also exempted. 

With respect to VAT, Germany levies a 19% rate on domestic flights. There is currently 
no fuel excise duty levied in Germany. 

IMPACTS 
The scenarios and the effect they have on the modelled impacts are presented in  
Table 27. 

Table 27 – Impacts per taxation scenario and change relative to the current situation for Germany 

Current 
situation 

Abolition of ticket 
tax 

Introducing VAT 
on all tickets 
(19%) 

Introducing fuel 
excise duty 

Impacts 

Value 

Value 

Change  Value 

Change  Value 

Change 

Aviation sector 

Passenger demand 
(million) 

99.3 

103.5 

4% 

83.7 

-16% 

87.1 

-12% 

Average ticket price 
(€) 

327 

314 

-4% 

382 

15% 

363 

12% 

4% 

-16% 

-12% 

65 

5.5 

68 

4% 

55 

-16% 

57 

-12% 

5.7 

4% 

4.6 

-16% 

4.8 

-12% 

25.0 

26.0 

4% 

21.0 

-16% 

21.9 

-12% 

792.2 

813.1 

3% 

706.4 

-11% 

726.3 

-8% 

1.9 

0.6 

-66% 

6.2 

232% 

4.8 

153% 

1,100 

1,100 

0% 

1,100 

-1% 

1,100 

0% 

121 

121 

0% 

121 

0% 

121 

0% 

37,600 

37,600 

0% 

37,600 

0% 

37,600 

0% 

2,614 

2,613 

0% 

2,616 

0% 

2,615 

0% 

Number of flights 
and connectivity 

Employment  
(1,000 FTE) 

Value added 
(€ billion) 

CO2 emissions 
(Mton) 

People affected by 
noise (1,000) 

Aviation-related 
fiscal revenue 
(€ billion) 

Impacts on major 
suppliers 

Employment  
(1,000 FTE) 

Value added 
(€ billion) 

Impacts on all 
other sectors 

Employment  
(1,000 FTE) 

Value added 
(€ billion) 

Total economic 
impacts 

81 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Current 
situation 

Abolition of ticket 
tax 

Introducing VAT 
on all tickets 
(19%) 

Introducing fuel 
excise duty 

38,700 

38,700 

0% 

38,700 

0% 

38,700 

0% 

Employment  
(1,000 FTE) 

GDP (€ billion) 

3,044 

3,043 

-0%  

3,044 

0% 

3,044 

0%  

*: The sum of value added gives the gross value added, which is equal to GDP plus taxes minus subsidies. 

In the first scenario, the current ticket tax is abolished. This causes the average ticket 
price to decrease by 4%. As a result, both the number of passengers and the number of 
flights increase by 4%. In turn, the increase in passenger demand leads to an increase in 
both the number of direct jobs and in the value added of the aviation sector, which both 
rise by the same 4%. However, this is compensated by an almost equal decrease in jobs 
in other sectors of the economy, so the net effect on employment is close to zero. 
Without a ticket tax, the aviation related fiscal revenues drop from € 1.9 billion to  
€ 0.6 billion as the only source of fiscal revenues is the VAT levied on domestic tickets. 
With regard to climate and environmental impacts, the CO2 emissions also increase by 
4%, and the number of people affected by noise by 3%. 

In the second scenario, the VAT rate of 19% that is currently levied to domestic flights 
applies to tickets for all destinations. As a result, the demand for flights by passengers 
and the number of flights decrease by 16% compared to the current situation. 
This results in a reduction of the number of direct jobs and the value added by the 
aviation sector of 16%, although the overall effect on jobs and GDP is negligible. 
The fiscal revenue increases to € 6,247 million, due to the extension of the VAT to all 
flights. The reduction in CO2 emissions is 16%, and the number of people affected by 
noise drops by 11%. Comparing these results with the first scenario, we can see that the 
(oppositely directed) effects of the VAT introduction are a factor four larger than the 
effects of the ticket tax abolition. 

The introduction of a fuel excise duty of 330 €/kilolitre causes the average ticket price to 
increase by 12% compared to the current situation. The number of flights and 
passengers decline by 12%, as do the CO2 emissions. The fiscal revenue amounts to 
€ 4,765 million. The relative reduction of the number of direct jobs and the value added 
by the aviation sector is 12% for both. The reduction in the number of people affected by 
noise of 8% is in line with the reduction of the number of flights. Thus, the impacts of 
this particular excise duty are found to be smaller than for extending the VAT on air 
passenger tickets to all destinations, but still substantially higher than the (oppositely 
directed) impacts of the ticket tax abolition. 

4.12. Greece 

CURRENT TAX REGIME 
Greece does not impose a ticket tax on air passengers. The country levies a VAT of 24% 
on domestic flights, but no excise duty on kerosene. 

IMPACTS 
The scenarios and the effect they have on the modelled impacts are presented in  
Table 28. 

82 

 
 
 
 
 
 
 
 
Table 28 – Impacts per taxation scenario and change relative to the current situation for Greece 

Current 
situation 

Introduction of 
ticket tax 

Introducing VAT 
on all tickets 
(24%) 

Introducing fuel 
excise duty 

Impacts 

Value 

Value 

Change  Value 

Change  Value 

Change 

Aviation sector 

Passenger demand 
(million) 

24.3 

23.1 

-5% 

20.1 

-17% 

22.5 

-7% 

Average ticket price 
(€) 

250 

260 

4% 

296 

16% 

267 

7% 

Number of flights 
and connectivity 

Employment  
(1,000 FTE) 

Value added 
(€ billion) 

CO2 emissions 
(Mton) 

People affected by 
noise (1,000) 

Aviation-related 
fiscal revenue 
(€ billion) 

Impacts on major 
suppliers 

Employment  
(1,000 FTE) 

Value added 
(€ billion) 

Impacts on all 
other sectors 

Employment  
(1,000 FTE) 

Value added 
(€ billion) 

Total economic 
impacts 

Employment  
(1,000 FTE) 

-5% 

-17% 

-7% 

6 

-5% 

5 

-17% 

6 

-7% 

0.5 

-5% 

0.5 

-17% 

0.5 

-7% 

3.1 

-5% 

2.7 

-17% 

3.0 

-7% 

n.a. 

n.a. 

n.a. 

n.a. 

n.a. 

n.a. 

0.5 

77% 

1.1 

310% 

0.6 

127% 

6 

0.6 

3.2 

n.a. 

0.3 

100 

100 

0% 

100 

0% 

100 

0% 

4 

4 

0% 

4 

0% 

4 

0% 

2,600 

2,600 

0% 

2,600 

0% 

2,600 

0% 

151 

151 

0% 

151 

0% 

151 

0% 

2,700 

2,700 

0% 

2,700 

0% 

2,700 

0% 

GDP (€ billion) 

176 

176 

-0% 

176 

-0%  

176 

-0%  

*: The sum of value added gives the gross value added, which is equal to GDP plus taxes minus subsidies. 

In the first scenario, a ticket tax is introduced with the same structure and level as the 
German Air Transport Tax. Because most passengers fly to destinations within Europe in 
economy class and other classes, the average ticket price rises by a value that is close to 
the corresponding € 7.47 tax rate, which comes down to a 4% increase. As a result, both 
the number of passengers and the number of flights decrease by 5%. In turn, the 
decrease in passenger demand leads to a drop in both the number of direct jobs and in 
the value added of the aviation sector, which both fall by the same 5%. However, this is 

83 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
compensated by an almost equal increase in jobs in other sectors of the economy, so the 
net effect on employment is close to zero. The fiscal revenue resulting from the 
introduced ticket tax is € 490 million, compared to € 277 million in the current situation. 
With regard to climate and environmental impacts, the CO2 emissions also decrease by 
5% (noise exposure data are lacking). 

In the second scenario, the VAT rate of 24% that is currently levied to domestic flights 
applies to tickets for all destinations. As a result, the demand for flights by passengers 
and the number of flights decrease by 17% compared to the current situation. 
This decrease is a factor three to four higher than for the ticket tax, which is caused by 
the higher average ticket price increase that the VAT brings about. It also leads to a 
larger reduction of the number of direct jobs and the value added by the aviation sector 
of 17%, although the overall effect on jobs and GDP is negligible. The extension of the 
VAT to all flights results in a total fiscal revenue of € 1,135 million. The reduction in 
CO2 emissions is 17%. 

The introduction of a fuel excise duty of 330 €/kilolitre causes the average ticket price to 
increase by 7% compared to the current situation. The number of flights and passengers 
decline by 7%, as do the CO2 emissions. The fiscal revenue amounts to € 629 million. 
The relative reduction of the number of direct jobs and the value added by the aviation 
sector is 7% for both. Thus, the impacts of this particular excise duty are found to be 
smaller than for extending the VAT on air passenger tickets to all destinations, but a bit 
higher than for the introduction of the ticket tax. 

4.13. Hungary 

CURRENT TAX REGIME 
Hungary does not impose a ticket tax on air passengers. The country levies a VAT of 
27% on domestic flights, but no excise duty on kerosene. 

IMPACTS 
The scenarios and the effect they have on the modelled impacts are presented in  
Table 29. 

Table 29 – Impacts per taxation scenario and change relative to the current situation for Hungary 

Current 
situation 

Introduction of 
ticket tax 

Introducing VAT 
on all tickets 
(27%) 

Introducing fuel 
excise duty 

Impacts 

Value 

Value 

Change 

Value 

Change 

Value 

Change 

Aviation sector 

Passenger demand 
(million) 

5.9 

5.6 

-5% 

4.2 

-28% 

5.5 

-5% 

Average ticket 
price (€) 

Number of flights 
and connectivity 

Employment  
(1,000 FTE) 

Value added 
(€ billion) 

CO2 emissions 
(Mton) 

258 

270 

4% 

328 

27% 

270 

5% 

-5% 

-28% 

-5% 

1 

0.5 

0.5 

1 

-5% 

1 

-29% 

1 

-5% 

0.5 

-5% 

0.4 

-29% 

0.5 

-5% 

0.5 

-5% 

0.4 

-28% 

0.5 

-5% 

84 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Current 
situation 

Introduction of 
ticket tax 

Introducing VAT 
on all tickets 
(27%) 

Introducing fuel 
excise duty 

50.9 

49.1 

-4% 

37.6 

-26% 

48.7 

-4% 

0 

0.1 

>>100%  0.3 

>>100%  0.1 

>>100% 

100 

100 

0% 

100 

0% 

100 

0% 

4 

4 

0% 

4 

0% 

4 

0% 

3,800 

3,800 

0% 

3,800 

0% 

3,800 

0% 

89 

89 

0% 

89 

0% 

89 

0% 

3,900 

3,900 

0% 

3,900 

0% 

3,900 

0% 

People affected by 
noise (1,000) 

Aviation-related 
fiscal revenue 
(€ billion) 

Impacts on 
major suppliers 

Employment  
(1,000 FTE) 

Value added 
(€ billion) 

Impacts on all 
other sectors 

Employment  
(1,000 FTE) 

Value added 
(€ billion) 

Total economic 
impacts 

Employment  
(1,000 FTE) 

GDP (€ billion) 

111 

111 

-0%  

111 

-0% 

111 

-0% 

*: The sum of value added gives the gross value added, which is equal to GDP plus taxes minus subsidies. 

In the first scenario, a ticket tax is introduced with the same structure and level as the 
German Air Transport Tax. Because most passengers fly to destinations within Europe in 
economy class and other classes, the average ticket price rises by a value that is close to 
the corresponding € 7.47 tax rate, which comes down to a 4% increase. As a result, both 
the number of passengers and the number of flights decrease by 5%. In turn, the 
decrease in passenger demand leads to a drop in both the number of direct jobs and in 
the value added of the aviation sector, which both fall by the same 5%. However, this is 
compensated by an almost equal increase in jobs in other sectors of the economy, so the 
net effect on employment is close to zero. The fiscal revenue resulting from the 
introduced ticket tax is € 64 million. With regard to climate and environmental impacts, 
the CO2 emissions also decrease by 5%, and the number of people affected by noise by 
4%. 

In the second scenario, the VAT rate of 27% that is currently levied to domestic flights 
applies to tickets for all destinations. As a result, the demand for flights by passengers 
and the number of flights decrease by 28% compared to the current situation. 
This decrease is a factor five to six higher than for the ticket tax, which is caused by the 
higher average ticket price increase that the VAT brings about. It also leads to a larger 
reduction of the number of direct jobs and the value added by the aviation sector of 
29%, although the overall effect on jobs and GDP is negligible. The extension of the 
VAT to all flights results in a total fiscal revenue of € 305 million. The reduction in 
CO2 emissions is 28%, and the number of people affected by noise drops by 26%. 
The introduction of a fuel excise duty of 330 €/kilolitre causes the average ticket price to 
increase by 5% compared to the current situation. The number of flights and passengers 
decline by 5%, as do the CO2 emissions. The fiscal revenue amounts to € 68 million. 
The relative reduction of the number of direct jobs and the value added by the aviation 

85 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
sector is 5% for both. The reduction in the number of people affected by noise of 4% is 
in line with the reduction of the number of flights. Thus, the impacts of this particular 
excise duty are found to be equal to those of the introduction of the ticket tax, but much 
smaller than for extending the VAT on air passenger tickets to all destinations. 

4.14. Ireland 

CURRENT TAX REGIME 
Ireland levies no aviation taxes: neither a passenger ticket tax, nor a VAT on air tickets, 
nor an excise duty on kerosene.  

IMPACTS 
The scenarios and the effect they have on the modelled impacts are presented in  
Table 30. 

Table 30 – Impacts per taxation scenario and change relative to the current situation for Ireland 

Current 
situation 

Introduction of 
ticket tax 

Introducing VAT 
on all tickets 
(19%) 

Introducing fuel 
excise duty 

Impacts 

Value 

Value 

Change 

Value 

Change 

Value 

Change 

Aviation sector 

Passenger demand 
(million) 

Average ticket 
price (€) 

Number of flights 
and connectivity 

Employment  
(1,000 FTE) 

Value added 
(€ billion) 

CO2 emissions 
(Mton) 

People affected by 
noise (1,000) 

Aviation-related 
fiscal revenue 
(€ billion) 

Impacts on 
major suppliers 

Employment  
(1,000 FTE) 

Value added 
(€ billion) 

Impacts on all 
other sectors 

Employment  
(1,000 FTE) 

Value added 
(€ billion) 

15.8 

15.0 

-5% 

12.6 

-20% 

14.4 

-8% 

280 

292 

5% 

333 

19% 

301 

8% 

-5% 

-20% 

-8% 

8 

2.2 

2.5 

8 

-5% 

6 

-21% 

8 

-9% 

2.1 

-5% 

1.7 

-21% 

2.0 

-9% 

2.3 

-5% 

2.0 

-20% 

2.3 

-8% 

21.4 

20.4 

-4% 

17.4 

-19% 

19.8 

-7% 

0 

0.2 

>>100%  0.7 

>>100%  0.3 

>>100% 

26 

13 

26 

0% 

26 

-1% 

26 

0% 

13 

0% 

13 

0% 

13 

0% 

1,600 

1,600 

0% 

1,600 

0% 

1,600 

0% 

228 

228 

0% 

228 

0% 

228 

0% 

86 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Current 
situation 

Introduction of 
ticket tax 

Introducing VAT 
on all tickets 
(19%) 

Introducing fuel 
excise duty 

1,700 

1,700 

0% 

1,700 

0% 

1,700 

0% 

Total economic 
impacts 

Employment  
(1,000 FTE) 

GDP (€ billion) 

262 

262 

-0% 

262 

-0% 

262 

-0% 

*: The sum of value added gives the gross value added, which is equal to GDP plus taxes minus subsidies. 

In the first scenario, a ticket tax is introduced with the same structure and level as the 
German Air Transport Tax. Because most passengers fly to destinations within Europe in 
economy class and other classes, the average ticket price rises by a value that is close to 
the corresponding € 7.47 tax rate, which comes down to a 5% increase. As a result, both 
the number of passengers and the number of flights decrease by 5%. In turn, the 
decrease in passenger demand leads to a drop in both the number of direct jobs and in 
the value added of the aviation sector, which both fall by the same 5%. However, this is 
compensated by an almost equal increase in jobs in other sectors of the economy, so the 
net effect on employment is close to zero. The fiscal revenue resulting from the 
introduced ticket tax is € 183 million. With regard to climate and environmental impacts, 
the CO2 emissions also decrease by 5%, and the number of people affected by noise by 
4%. 

The VAT rate that is applied to the second scenario is based on the standard VAT rate on 
international transport tickets in Ireland, which is 19%. If this VAT rate were introduced 
on tickets for all destinations, the demand for flights by passengers and the resulting 
number of flights would decrease much more than in the ticket tax scenario: by 20% 
(compared to 5%). This is caused by the higher average ticket price increase that the 
VAT brings about. This results in a larger reduction of the number of direct jobs and the 
value added by the aviation sector of 21%, although the overall effect on jobs and GDP is 
negligible. The introduction of the VAT results in a total fiscal revenue of € 708 million. 
The reduction in CO2 emissions is 20%, and the number of people affected by noise 
drops by 19%. 

The introduction of a fuel excise duty of 330 €/kilolitre causes the average ticket price to 
increase by 8% compared to the current situation. The number of flights and passengers 
decline by 8%, as do the CO2 emissions. The fiscal revenue amounts to € 299 million. 
The relative reduction of the number of direct jobs and the value added by the aviation 
sector is 9% for both. The reduction in the number of people affected by noise of 7% is 
in line with the reduction of the number of flights. Thus, the impacts of this particular 
excise duty are found to be smaller than for the VAT on air passenger tickets, but higher 
than for the ticket tax scenario. 

87 

 
 
 
 
 
 
 
 
 
 
 
 
 
4.15. Italy 

CURRENT TAX REGIME 
Italy charges two types of ticket tax to air passengers. The Italy Embarkation Tax 
distinguishes between three destination bands. The Italy City Council Tax consists of a 
single tariff for all passengers. A luxury tax is levied on private aircraft, but was not 
included in the model since we do not know which type of planes transported Italian 
passengers. See Table 31. 

Table 31 – Ticket tax rates in Italy 

Ticket tax type 

Tax rate description 

Tax rate 

Italy Embarkation Tax 

To domestic destinations 

€ 6.57 

Italy City Council Tax 

To EU & EEA countries 

To other countries 

€ 12.69 

€ 18.14 

€ 7.07 

*: Italy levies a VAT of 10% on domestic flights, but no excise duty on kerosene. 

IMPACTS 
The scenarios and the effect they have on the modelled impacts are presented in  
Table 32. 

Table 32 – Impacts per taxation scenario and change relative to the current situation for Italy 

Current 
situation 

Abolition of ticket 
tax 

Introducing VAT 
on all tickets 
(10%) 

Introducing fuel 
excise duty 

Impacts 

Value 

Value 

Change  Value 

Change  Value 

Change 

Aviation sector 

Passenger demand 
(million) 

79.6 

88.7 

11% 

74.2 

-7% 

73.0 

-8% 

Average ticket price 
(€) 

255 

235 

-10% 

275 

7% 

274 

8% 

Number of flights 
and connectivity 

Employment  
(1,000 FTE) 

Value added 
(€ billion) 

CO2 emissions 
(Mton) 

People affected by 
noise (1,000) 

Aviation-related 
fiscal revenue 
(€ billion) 

Impacts on major 
suppliers 

Employment  
(1,000 FTE) 

11% 

-7% 

-8% 

20 

0.7 

22 

11% 

19 

-7% 

18 

-8% 

0.7 

11% 

0.6 

-7% 

0.6 

-8% 

11.4 

12.7 

11% 

10.6 

-7% 

10.4 

-8% 

217.6 

232.1 

7% 

207.8 

-4% 

205.6 

-5% 

1.9 

0.4 

-79% 

3.3 

69% 

3.2 

63% 

600 

600 

0% 

600 

0% 

600 

0% 

88 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Current 
situation 

Abolition of ticket 
tax 

Introducing VAT 
on all tickets 
(10%) 

Introducing fuel 
excise duty 

47 

47 

0% 

47 

0% 

47 

0% 

17,700 

17,700 

0% 

17,700 

0% 

17,700 

0% 

1,437 

1,437 

0% 

1,437 

0% 

1,437 

0% 

18,300 

18,300 

0% 

18,300 

0% 

18,300 

0% 

Value added 
(€ billion) 

Impacts on all 
other sectors 

Employment  
(1,000 FTE) 

Value added 
(€ billion) 

Total economic 
impacts 

Employment  
(1,000 FTE) 

GDP (€ billion) 

1,653 

1,653 

0%  

1,653 

-0%  

1,653 

-0%  

*: The sum of value added gives the gross value added, which is equal to GDP plus taxes minus subsidies. 

In the first scenario, the current ticket tax is abolished. This causes the average ticket 
price to decrease by 10%. As a result, both the number of passengers and the number of 
flights increase by 11%. In turn, the increase in passenger demand leads to an increase 
in both the number of direct jobs and in the value added of the aviation sector, which 
both rise by the same 11%. However, this is compensated by an almost equal decrease 
in jobs in other sectors of the economy, so the net effect on employment is close to zero. 
Without a ticket tax, the aviation related fiscal revenues drop from € 1.9 billion to  
€ 0.4 billion as the only source of fiscal revenues is the VAT levied on domestic 
tickets.With regard to climate and environmental impacts, the CO2 emissions also 
increase by 11%, and the number of people affected by noise by 7%. 

In the second scenario, the VAT rate of 10% that is currently levied to domestic flights 
applies to tickets for all destinations. As a result, the demand for flights by passengers 
and the number of flights decrease by 7% compared to the current situation. This results 
in a reduction of the number of direct jobs and the value added by the aviation sector of 
7%, although the overall effect on jobs and GDP is negligible. The fiscal revenue 
increases to € 3,265 million, due to the extension of the VAT to all flights. The reduction 
in CO2 emissions is 7%, and the number of people affected by noise drops by 4%. 
Comparing these results with the first scenario, we can see that the (oppositely directed) 
effects of the VAT introduction are a bit smaller than the effects of the ticket tax 
abolition. 

The introduction of a fuel excise duty of 330 €/kilolitre causes the average ticket price to 
increase by 8% compared to the current situation. The number of flights and passengers 
decline by 8%, as do the CO2 emissions. The fiscal revenue amounts to € 3,152 million. 
The relative reduction of the number of direct jobs and the value added by the aviation 
sector is 8% for both. The reduction in the number of people affected by noise of 5% is 
in line with the reduction of the number of flights. Thus, the impacts of this particular 
excise duty are found to be similar to those of extending the VAT on air passenger tickets 
to all destinations. 

89 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
4.16. Latvia 

CURRENT TAX REGIME 
Latvia does not impose a ticket tax on air passengers. The country levies a VAT of 12% 
on domestic flights, but no excise duty on kerosene. 

IMPACTS 
The scenarios and the effect they have on the modelled impacts are presented in  
Table 33. 

Table 33 – Impacts per taxation scenario and change relative to the current situation for Latvia 

Current 
situation 

Introduction of 
ticket tax 

Introducing VAT 
on all tickets 
(12%) 

Introducing fuel 
excise duty 

Impacts 

Value 

Value 

Change 

Value 

Change 

Value 

Change 

Aviation sector 

Passenger demand 
(million) 

2.0 

Average ticket price 
(€) 

188 

1.9 

-6% 

1.7 

-13% 

1.7 

-14% 

198 

5% 

211 

12% 

212 

13% 

-6% 

-13% 

-14% 

Number of flights 
and connectivity 

Employment  
(1,000 FTE) 

Value added 
(€ billion) 

CO2 emissions 
(Mton) 

People affected by 
noise (1,000) 

Aviation-related 
fiscal revenue 
(€ billion) 

Impacts on major 
suppliers 

Employment  
(1,000 FTE) 

Value added 
(€ billion) 

Impacts on all 
other sectors 

Employment  
(1,000 FTE) 

Value added 
(€ billion) 

Total economic 
impacts 

Employment  
(1,000 FTE) 

1 

1 

-6% 

1 

-13% 

1 

-14% 

0.043 

0.040 

-6% 

0.037 

-13% 

0.037 

-14% 

0.3 

n.a. 

0 

35 

1 

0.3 

-6% 

0.3 

-13% 

0.3 

-14% 

n.a. 

n.a. 

n.a. 

n.a. 

n.a. 

n.a. 

0.02 

>>100%  0.04 

>>100%  0.04 

>>100% 

35 

0% 

1 

0% 

0 

1 

0% 

0% 

0 

1 

0% 

0% 

700 

700 

0% 

700 

0% 

700 

0% 

20 

20 

0% 

20 

0% 

20 

0% 

800 

800 

0% 

800 

0% 

800 

0% 

GDP (€ billion) 

24 

24 

0%  

24 

0%  

24 

0%  

90 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
*: The sum of value added gives the gross value added, which is equal to GDP plus taxes minus subsidies. 

In the first scenario, a ticket tax is introduced with the same structure and level as the 
German Air Transport Tax. Because most passengers fly to destinations within Europe in 
economy class and other classes, the average ticket price rises by a value that is close to 
the corresponding € 7.47 tax rate, which comes down to a 5% increase. As a result, both 
the number of passengers and the number of flights decrease by 6%. In turn, the 
decrease in passenger demand leads to a drop in both the number of direct jobs and in 
the value added of the aviation sector, which both fall by the same 6%. However, this is 
compensated by an almost equal increase in jobs in other sectors of the economy, so the 
net effect on employment is close to zero. The fiscal revenue resulting from the 
introduced ticket tax is € 18 million. With regard to climate and environmental impacts, 
the CO2 emissions also decrease by 6% (noise exposure data are lacking). 

In the second scenario, the VAT rate of 12% that is currently levied to domestic flights 
applies to tickets for all destinations. As a result, the demand for flights by passengers 
and the number of flights decrease by 13% compared to the current situation. 
This decrease is a factor two higher than for the ticket tax, which is caused by the higher 
average ticket price increase that the VAT brings about. It also leads to a larger reduction 
of the number of direct jobs and the value added by the aviation sector of 13%, although 
the overall effect on jobs and GDP is negligible. The extension of the VAT to all flights 
results in a total fiscal revenue of € 40 million. The reduction in CO2 emissions is 13%. 

The introduction of a fuel excise duty of 330 €/kilolitre causes the average ticket price to 
increase by 13% compared to the current situation. The number of flights and 
passengers decline by 14%, as do the CO2 emissions. The fiscal revenue amounts to 
€ 40 million. The relative reduction of the number of direct jobs and the value added by 
the aviation sector is 14% for both. Thus, the impacts of this particular excise duty are 
similar to those of extending the VAT on air passenger tickets to all destinations, and 
higher than for the introduction of the ticket tax. 

4.17. Lithuania 

CURRENT TAX REGIME 
Lithuania does not impose a ticket tax on air passengers. The country levies a VAT of 9% 
on domestic flights, but no excise duty on kerosene. 

IMPACTS 
The scenarios and the effect they have on the modelled impacts are presented in  
Table 34. 

Table 34 – Impacts per taxation scenario and change relative to the current situation for Lithuania 

Current 
situation 

Introduction of 
ticket tax 

Introducing VAT on 
all tickets (9%) 

Introducing fuel 
excise duty 

Impacts 

Value 

Value 

Change 

Value 

Change 

Value 

Change 

Aviation sector 

Passenger demand 
(million) 

Average ticket price 
(€) 

Number of flights 
and connectivity 

Employment  
(1,000 FTE) 

2.4 

2.3 

-6% 

2.2 

-10% 

2.1 

-10% 

163 

172 

5% 

178 

9% 

178 

9% 

-6% 

-10% 

-10% 

0.46 

0.43 

-6% 

0.41 

-10% 

0.41 

-11% 

91 

 
 
 
 
 
 
 
 
 
 
 
 
Current 
situation 

Introduction of 
ticket tax 

Introducing VAT on 
all tickets (9%) 

Introducing fuel 
excise duty 

0.032 

0.030 

-6% 

0.029 

-10% 

0.029 

-11% 

0.2 

0.2 

-6% 

0.2 

-10% 

0.2 

-10% 

32.7 

30.7 

-6% 

30.2 

-8% 

30.2 

-8% 

0.0 

0.020 

>>100% 

0.032 

>>100% 

0.032 

>>100% 

33 

2 

32 

0% 

32 

0% 

32 

0% 

2 

0% 

2 

0% 

2 

0% 

1,100 

1,100 

0% 

1,100 

0% 

1,100 

0% 

32 

32 

0% 

32 

0% 

32 

0% 

1,200 

1,200 

0% 

1,200 

0% 

1,200 

0% 

Value added 
(€ billion) 

CO2 emissions 
(Mton) 

People affected by 
noise (1,000) 

Aviation-related 
fiscal revenue 
(€ billion) 

Impacts on major 
suppliers 

Employment  
(1,000 FTE) 

Value added 
(€ billion) 

Impacts on all 
other sectors 

Employment  
(1,000 FTE) 

Value added 
(€ billion) 

Total economic 
impacts 

Employment  
(1,000 FTE) 

GDP (€ billion) 

37 

37 

-0%  

37 

-0%  

37 

-0%  

*: The sum of value added gives the gross value added, which is equal to GDP plus taxes minus subsidies. 

In the first scenario, a ticket tax is introduced with the same structure and level as the 
German Air Transport Tax. Because most passengers fly to destinations within Europe in 
economy class and other classes, the average ticket price rises by a value that is close to 
the corresponding € 7.47 tax rate, which comes down to a 5% increase. As a result, both 
the number of passengers and the number of flights decrease by 6%. In turn, the 
decrease in passenger demand leads to a drop in both the number of direct jobs and in 
the value added of the aviation sector, which both fall by the same 6%. However, this is 
compensated by an almost equal increase in jobs in other sectors of the economy, so the 
net effect on employment is close to zero. The fiscal revenue resulting from the 
introduced ticket tax is € 20 million. With regard to climate and environmental impacts, 
both the CO2 emissions and the number of people affected by noise decrease by 6%. 

In the second scenario, the VAT rate of 9% that is currently levied to domestic flights 
applies to tickets for all destinations. As a result, the demand for flights by passengers 
and the number of flights decrease by 10% compared to the current situation. This 
decrease is higher than for the ticket tax, which is caused by the higher average ticket 
price increase that the VAT brings about. It also leads to a larger reduction of the number 
of direct jobs and the value added by the aviation sector of 10%, although the overall 
effect on jobs and GDP is negligible. The extension of the VAT to all flights results in a 
total fiscal revenue of € 32 million. The reduction in CO2 emissions is 10%, and the 
number of people affected by noise drops by 8%. 

92 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
The introduction of a fuel excise duty of 330 €/kilolitre causes the average ticket price to 
increase by 9% compared to the current situation. The number of flights and passengers 
decline by 10%, as do the CO2 emissions. The fiscal revenue amounts to € 32 million. 
The relative reduction of the number of direct jobs and the value added by the aviation 
sector is 11% for both. The reduction in the number of people affected by noise of 8% is 
in line with the reduction of the number of flights. Thus, the impacts of this particular 
excise duty are found to be similar to those of extending the VAT on air passenger tickets 
to all destinations, and higher than for the introduction of the ticket tax. 

4.18. Luxembourg 

CURRENT TAX REGIME 
Luxembourg does not impose a ticket tax on air passengers. The country levies a VAT of 
3% on domestic flights, but no excise duty on kerosene. 

IMPACTS 
The scenarios and the effect they have on the modelled impacts are presented in  
Table 35. 

Table 35 – Impacts per taxation scenario and change relative to the current situation for Luxembourg 

Current 
situation 

Introduction of ticket 
tax 

Introducing VAT on 
all tickets (3%) 

Introducing fuel 
excise duty 

Impacts 

Value 

Value 

Change 

Value 

Change 

Value 

Change 

1.5 

1.4 

-4% 

1.4 

-3% 

317 

327 

3% 

326 

3% 

* 

* 

-4% 

-3% 

Not 
available 

Not 
available 

Not 
available 

Not 
available 

- 

- 

Not 
available 

Not 
available 

- 

- 

Not 
available 

Not 
available 

1.2 

1.2 

-4% 

1.2 

-3% 

52.9 

52.1 

-1% 

52.2 

-1% 

0.0 

0.01 

- 

0.01 

- 

Aviation sector 

Passenger demand 
(million) 

Average ticket price 
(€) 

Number of flights 
and connectivity 

Employment  
(1,000 FTE) 

Value added 
(€ billion) 

CO2 emissions 
(Mton) 

People affected by 
noise (1,000) 

Aviation-related 
fiscal revenue 
(€ billion) 

Impacts on major 
suppliers 

Employment  
(1,000 FTE) 

Value added 
(€ billion) 

Impacts on all 
other sectors 

Not 
available 

Not 
available 

Not 
available 

Not 
available 

- 

- 

- 

Not 
available 

Not 
available 

Not 
available 

- 

- 

- 

Employment  
(1,000 FTE) 

Not 
available 

Not 
available 

* 

* 

* 

- 

- 

* 

* 

* 

- 

- 

* 

* 

* 

Not 
available 

Not 
available 

Not 
available 

- 

93 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Current 
situation 

Introduction of ticket 
tax 

Introducing VAT on 
all tickets (3%) 

Introducing fuel 
excise duty 

Value added 
(€ billion) 

Not 
available 

Not 
available 

Total economic 
impacts 

Employment  
(1,000 FTE) 

GDP (€ billion) 

Not 
available 

Not 
available 

- 

- 

Not 
available 

Not 
available 

- 

- 

Not 
available 

- 

Not 
available 

- 

Not 
available 

Not 
available 

Not 
available 

Not 
available 

Not 
available 

Not 
available 

Not 
available 

*:   The calculation of the impact of an excise duty on ticket prices yields unreliable results, which may be the 

result of the relatively high share of full freight flights from Luxemburg airports. 

**:   The sum of value added gives the gross value added, which is equal to GDP plus taxes minus subsidies. 

It must be noted that input-output data were not available for the aviation sector in 
Luxembourg. Therefore, the effects on jobs and economic value added could not be 
estimated. 

In the first scenario, a ticket tax is introduced with the same structure and level as the 
German Air Transport Tax. Because most passengers fly to destinations within Europe in 
economy class and other classes, the average ticket price rises by a value that is close to 
the corresponding € 7.47 tax rate, which comes down to a 3% increase. As a result, both 
the number of passengers and the number of flights decrease by 4%. The fiscal revenue 
resulting from the introduced ticket tax is € 14 million. With regard to climate and 
environmental impacts, the CO2 emissions also decrease by 4%, and the number of 
people affected by noise by 1%. 

In the second scenario, the VAT rate of 3% that is currently levied to domestic flights 
applies to tickets for all destinations. As a result, the demand for flights by passengers 
and the number of flights decrease by 3% compared to the current situation. 
This decrease is similar to the one in the ticket tax scenario, which is caused by the 
similar ticket price increase. The fiscal revenue is € 14 million. The reduction in 
CO2 emissions is 3%, and the number of people affected by noise drops by 1%. 

The impacts of the introduction of a fuel excise duty of 330 €/kilolitre are found to be 
more than ten times higher than for both the VAT scenario and the ticket tax scenario. 
The fuel excise duty causes the average ticket price to increase by 45% compared to the 
current situation. The number of flights and passengers decline by 48%, as do the 
CO2 emissions. The fiscal revenue amounts to € 98 million. The reduction in the number 
of people affected by noise of 27% is much lower than the reduction of the number of 
flights.  

4.19. Malta 

CURRENT TAX REGIME 
Malta levies no aviation taxes: neither a passenger ticket tax, nor a VAT on air tickets, 
nor an excise duty on kerosene.  

IMPACTS 
The scenarios and the effect they have on the modelled impacts are presented in  
Table 36. 

Table 36 – Impacts per taxation scenario and change relative to the current situation for Malta 

94 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Current 
situation 

Introduction of 
ticket tax 

Introducing VAT on 
all tickets (18%) 

Introducing fuel 
excise duty 

Impacts 

Value 

Value 

Change 

Value 

Change 

Value 

Change 

Aviation sector 

Passenger 
demand (million) 

Average ticket 
price (€) 

Number of flights 
and connectivity 

Employment 
(1,000 FTE) 

Value added 
(€ billion) 

CO2 emissions 
(Mton) 

People affected by 
noise (1,000) 

Aviation-related 
fiscal revenue 
(€ billion) 

Impacts on 
major suppliers 

Employment 
(1,000 FTE) 

Value added 
(€ billion) 

Impacts on all 
other sectors 

Employment 
(1,000 FTE) 

Value added 
(€ billion) 

Total economic 
impacts 

Employment 
(1,000 FTE) 

2.6 

2.4 

-5% 

2.1 

-20% 

2.3 

-10% 

224 

233 

4% 

264 

18% 

243 

9% 

-5% 

-20% 

-10% 

Not available  Not 

available 

Not available  Not 

available 

- 

- 

Not 
available 

Not 
available 

- 

- 

Not 
available 

Not 
available 

- 

- 

0.3 

0.3 

-5% 

0.3 

-20% 

0.3 

-10% 

n.a. 

n.a. 

n.a. 

n.a. 

n.a. 

n.a. 

n.a. 

0 

0.02 

>>100%  0.08 

>>100%  0.04 

>>100% 

Not available  Not 

available 

Not available  Not 

available 

Not available  Not 

available 

Not available  Not 

available 

- 

- 

- 

- 

Not 
available 

Not 
available 

Not 
available 

Not 
available 

Not available  Not 

- 

available 

Not 
available 

- 

- 

- 

- 

- 

Not 
available 

Not 
available 

Not 
available 

Not 
available 

- 

- 

- 

- 

Not 
available 

- 

GDP (€ billion) 

10 

10 

-0% 

10 

-0%  

10 

-0%  

*: The sum of value added gives the gross value added, which is equal to GDP plus taxes minus subsidies. 
It must be noted that input-output data were not available for the aviation sector in 
Malta. Therefore, the effects on jobs and economic value added could not be estimated. 

In the first scenario, a ticket tax is introduced with the same structure and level as the 
German Air Transport Tax. Because most passengers fly to destinations within Europe in 
economy class and other classes, the average ticket price rises by a value that is close to 
the corresponding € 7.47 tax rate, which comes down to a 4% increase. As a result, both 
the number of passengers and the number of flights decrease by 5%. The fiscal revenue 
resulting from the introduced ticket tax is € 21 million. With regard to climate and 
environmental impacts, the CO2 emissions also decrease by 5% (data of noise exposure 
are not available). 

95 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
The VAT rate that is applied to the second scenario is based on the standard VAT rate on 
international transport tickets in Malta, which is 18%. If this VAT rate were introduced on 
tickets for all destinations, the demand for flights by passengers and the resulting 
number of flights would decrease four times more than in the ticket tax scenario: by 
20% (compared to 5%). This is caused by the higher average ticket price increase that 
the VAT brings about. The reduction in CO2 emissions is 20%. 

The introduction of a fuel excise duty of 330 €/kilolitre causes the average ticket price to 
increase by 9% compared to the current situation. The number of flights and passengers 
decline by 10%, as do the CO2 emissions. The fiscal revenue amounts to € 43 million. 
Thus, the impacts of this particular excise duty are found to be twice as small as for the 
VAT on air passenger tickets, but still twice as high as for the ticket tax scenario. 

4.20. The Netherlands 

CURRENT TAX REGIME 
The Netherlands does not levy a ticket tax. There is a VAT on air tickets of 21% for 
domestic flights, but no excise duty. 

IMPACTS 
The scenarios and the effect they have on the modelled impacts are presented in  
Table 37. 

Table 37 – Impacts per taxation scenario and change relative to the current situation for Netherlands 

Current 
situation 

Introduction of 
ticket tax 

Introducing VAT on 
all tickets (21%) 

Introducing fuel 
excise duty 

Impacts 

Value 

Value 

Change 

Value 

Change 

Value 

Change 

Aviation sector 

Passenger demand 
(million) 

Average ticket price 
(€) 

Number of flights 
and connectivity 

Employment  
(1,000 FTE) 

Value added 
(€ billion) 

CO2 emissions 
(Mton) 

People affected by 
noise (1,000) 

Aviation-related 
fiscal revenue 
(€ billion) 

Impacts on major 
suppliers 

Employment  
(1,000 FTE) 

Value added 
(€ billion) 

23.1 

22.2 

-4% 

18.2 

-21% 

18.7 

-19% 

371 

386 

4% 

449 

21% 

435 

19% 

-4% 

-21% 

-19% 

25 

3.4 

24 

-4% 

20 

-22% 

20 

-20% 

3.2 

-4% 

2.6 

-22% 

2.7 

-20% 

11.1 

10.6 

-4% 

8.7 

-21% 

9.0 

-19% 

55.4 

53.7 

-3% 

45.8 

-17% 

46.9 

-15% 

0.0 

0.3 

>>100%  1.5 

>>100% 

1.2 

>>100% 

200 

200 

0% 

200 

-1% 

200 

-1% 

27 

27 

0% 

26 

-1% 

26 

0% 

96 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Current 
situation 

Introduction of 
ticket tax 

Introducing VAT on 
all tickets (21%) 

Introducing fuel 
excise duty 

7,100 

7,100 

0% 

7,100 

0% 

7,100 

0% 

585 

585 

0% 

587 

0% 

586 

0% 

7,300 

7,300 

0% 

7,300 

0% 

7,300 

0% 

Impacts on all 
other sectors 

Employment  
(1,000 FTE) 

Value added 
(€ billion) 

Total economic 
impacts 

Employment  
(1,000 FTE) 

GDP (€ billion) 

683 

684 

0% 

684 

0%  

684 

0%  

*: The sum of value added gives the gross value added, which is equal to GDP plus taxes minus subsidies. 

In the first scenario, a ticket tax is introduced with the same structure and level as the 
German Air Transport Tax. Because most passengers fly to destinations within Europe in 
economy class and other classes, the average ticket price rises by a value that is 
relatively close to the corresponding € 7.47 tax rate, which comes down to a 4% 
increase. As a result, both the number of passengers and the number of flights decrease 
by 4%. In turn, the decrease in passenger demand leads to a drop in both the number of 
direct jobs and in the value added of the aviation sector, which both fall by the same 4%. 
However, this is compensated by an almost equal increase in jobs in other sectors of the 
economy, so the net effect on employment is close to zero. The fiscal revenue resulting 
from the introduced ticket tax is € 324 million. With regard to climate and environmental 
impacts, the CO2 emissions also decrease by 4%, and the number of people affected by 
noise by 3%. 

In the second scenario, the VAT rate of 21% that is currently levied to domestic flights 
applies to tickets for all destinations. As a result, the demand for flights by passengers 
and the number of flights decrease by 21% compared to the current situation.  
This decrease is more than five times higher than for the ticket tax, which is caused by 
the higher average ticket price increase that the VAT brings about. It also leads to a 
larger reduction of the number of direct jobs and the value added by the aviation sector 
of 22%, although the overall effect on jobs and GDP is negligible. The extension of the 
VAT to all flights results in a total fiscal revenue of € 1,500 million. The reduction in 
CO2 emissions is 21%, and the number of people affected by noise drops by 17%. 

The introduction of a fuel excise duty of 330 €/kilolitre causes the average ticket price to 
increase by 19% compared to the current situation. The number of flights and 
passengers decline by 19%, as do the CO2 emissions. The fiscal revenue amounts to 
€ 1,192 million. The relative reduction of the number of direct jobs and the value added 
by the aviation sector is 20% for both. The reduction in the number of people affected by 
noise of 15% is in line with the reduction of the number of flights. Thus, the impacts of 
this particular excise duty are found to be slightly smaller than for extending the VAT on 
air passenger tickets to all destinations, but still much higher than for the introduction of 
the ticket tax. 

97 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
4.21. Poland 

CURRENT TAX REGIME 
Poland does not impose a ticket tax on air passengers. The country levies a VAT of 8% 
on domestic flights, but no excise duty on kerosene. 

IMPACTS 
The scenarios and the effect they have on the modelled impacts are presented in  
Table 38. 

Table 38 – Impacts per taxation scenario and change relative to the current situation for Poland 

Current 
situation 

Introduction of 
ticket tax 

Introducing VAT on 
all tickets (8%) 

Introducing fuel 
excise duty 

Impacts 

Value 

Value 

Change 

Value 

Change 

Value 

Change 

15.1 

14.2 

-6% 

13.9 

-8% 

13.5 

-10% 

195 

205 

5% 

210 

7% 

212 

9% 

-6% 

-8% 

-10% 

Not available 

Not available 

Not 
available 

Not 
available 

- 

- 

Not 
available 

Not 
available 

- 

- 

Not 
available 

Not 
available 

- 

- 

1.9 

1.8 

-6% 

1.8 

-8% 

1.7 

-10% 

68.7 

65.4 

-5% 

64.3 

-6% 

63.1 

-8% 

0.0 

0.2 

>>100%  0.2 

>>100%  0.2 

>>100% 

Aviation sector 

Passenger 
demand (million) 

Average ticket 
price (€) 

Number of flights 
and connectivity 

Employment  
(1,000 FTE) 

Value added 
(€ billion) 

CO2 emissions 
(Mton) 

People affected 
by noise (1,000) 

Aviation-related 
fiscal revenue 
(€ billion) 

Impacts on 
major suppliers 

Employment  
(1,000 FTE) 

Value added 
(€ billion) 

Not available 

Not available 

Not 
available 

Not 
available 

Impacts on all 
other sectors 

Employment  
(1,000 FTE) 

Value added 
(€ billion) 

Total economic 
impacts 

Not available 

Not available 

Not 
available 

Not 
available 

Employment  
(1,000 FTE) 

Not available 

Not 
available 

- 

- 

- 

- 

- 

Not 
available 

Not 
available 

Not 
available 

Not 
available 

Not 
available 

- 

- 

- 

- 

- 

Not 
available 

Not 
available 

Not 
available 

Not 
available 

Not 
available 

- 

- 

- 

- 

- 

GDP (€ billion) 

430 

430 

-0%  

430 

-0%  

430 

-0%  

*: The sum of value added gives the gross value added, which is equal to GDP plus taxes minus subsidies. 

98 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
First of all, it must be noted that input-output data were not available for the aviation 
sector in Poland. Therefore, the effects on jobs and economic value added could not be 
estimated. 

In the first scenario, a ticket tax is introduced with the same structure and level as the 
German Air Transport Tax. Because most passengers fly to destinations within Europe in 
economy class and other classes, the average ticket price rises by a value that is close to 
the corresponding € 7.47 tax rate, which comes down to a 5% increase. As a result, both 
the number of passengers and the number of flights decrease by 6%. The fiscal revenue 
resulting from the introduced ticket tax is € 151 million, compared to € 9 million in the 
current situation (generated by the current VAT on domestic flights). With regard to 
climate and environmental impacts, the CO2 emissions also decrease by 6%, and the 
number of people affected by noise by 5%. 

In the second scenario, the VAT rate of 8% that is currently levied to domestic flights 
applies to tickets for all destinations. As a result, the demand for flights by passengers 
and the number of flights decrease by 8% compared to the current situation.  
This decrease is a bit higher than for the ticket tax, which is caused by the higher 
average ticket price increase that the VAT brings about. The extension of the VAT to all 
flights results in a total fiscal revenue of € 217 million. The reduction in CO2 emissions is 
8%, and the number of people affected by noise drops by 6%. 

The introduction of a fuel excise duty of 330 €/kilolitre causes the average ticket price to 
increase by 9% compared to the current situation. The number of flights and passengers 
decline by 10%, as do the CO2 emissions. The fiscal revenue amounts to € 246 million. 
The reduction in the number of people affected by noise of 8% is in line with the 
reduction of the number of flights. Thus, the impacts of this particular excise duty are 
found to be (less than two times) higher than for both the VAT scenario and the ticket 
tax scenario. 

4.22. Portugal 

CURRENT TAX REGIME 
Portugal does not impose a ticket tax on air passengers. The country levies a VAT of 6% 
on domestic flights, except when flying to/from the Madeira Islands and the Azores 
Islands, or between the islands. There is no excise duty on kerosene. 

IMPACTS 
The scenarios and the effect they have on the modelled impacts are presented in  
Table 39. 

Table 39 – Impacts per taxation scenario and change relative to the current situation for Portugal 

Current 
situation 

Introduction of 
ticket tax 

Introducing VAT 
on all tickets 
(6%) 

Introducing fuel 
excise duty 

Impacts 

Value 

Value 

Change 

Value 

Change 

Value 

Change 

Aviation sector 

Passenger demand 
(million) 

20.2 

19.2 

-5% 

19.1 

-5% 

18.0 

-11% 

Average ticket price 
(€) 

257 

Number of flights 
and connectivity 

267 

4% 

270 

5% 

281 

10% 

-5% 

-5% 

-11% 

99 

 
 
 
 
 
 
 
 
 
 
 
 
 
Current 
situation 

Introduction of 
ticket tax 

Introducing VAT 
on all tickets 
(6%) 

Introducing fuel 
excise duty 

11 

0.9 

3.5 

11 

-5% 

11 

-5% 

10 

-11% 

0.9 

-5% 

0.9 

-5% 

0.8 

-11% 

3.3 

-5% 

3.3 

-5% 

3.1 

-11% 

49.1 

47.8 

-3% 

47.6 

-3% 

45.9 

-6% 

0.0 

0.2 

>>100%  0.3 

>>100%  0.5 

>>100% 

100 

100 

0% 

100 

0% 

100 

-1% 

5 

5 

0% 

5 

0% 

5 

-1% 

3,800 

3,800 

0% 

3,800 

0% 

3,800 

0% 

151 

151 

0% 

151 

0% 

151 

0% 

3,900 

3,900 

0% 

3,900 

0% 

3,900 

0% 

Employment  
(1,000 FTE) 

Value added 
(€ billion) 

CO2 emissions 
(Mton) 

People affected by 
noise (1,000) 

Aviation-related 
fiscal revenue 
(€ billion) 

Impacts on major 
suppliers 

Employment  
(1,000 FTE) 

Value added 
(€ billion) 

Impacts on all 
other sectors 

Employment  
(1,000 FTE) 

Value added 
(€ billion) 

Total economic 
impacts 

Employment  
(1,000 FTE) 

GDP (€ billion) 

180 

180 

-0% 

180 

-0%  

180 

-0%  

*: The sum of value added gives the gross value added, which is equal to GDP plus taxes minus subsidies. 

In the first scenario, a ticket tax is introduced with the same structure and level as the 
German Air Transport Tax. Because most passengers fly to destinations within Europe in 
economy class and other classes, the average ticket price rises by a value that is close to 
the corresponding € 7.47 tax rate, which comes down to a 4% increase. As a result, both 
the number of passengers and the number of flights decrease by 5%. In turn, the 
decrease in passenger demand leads to a drop in both the number of direct jobs and in 
the value added of the aviation sector, which both fall by the same 5%. However, this is 
compensated by an almost equal increase in jobs in other sectors of the economy, so the 
net effect on employment is close to zero. The fiscal revenue resulting from the 
introduced ticket tax is € 239 million, compared to € 32 million in the current situation 
(generated by the current VAT). With regard to climate and environmental impacts, the 
CO2 emissions also decrease by 5%, and the number of people affected by noise by 3%. 

In the second scenario, the VAT rate of 6% that is currently levied to domestic flights 
applies to tickets for all destinations. As a result, the demand for flights by passengers 
and the number of flights decrease by 5% compared to the current situation.  
This decrease is very similar to the one in the ticket tax scenario. It also leads to a 
similar reduction of the number of direct jobs and the value added by the aviation sector 
of 5%, but the overall effect on jobs and GDP is negligible. The VAT extension results in a 

100 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
higher fiscal revenue (€ 293 million) than the ticket tax, indicating that the tax per 
passenger is higher in the VAT scenario. The reduction in CO2 emissions is 5%, and the 
number of people affected by noise drops by 3%. 

The strongest effects can be observed for the introduction of a fuel excise duty of 
330 €/kilolitre, which causes the average ticket price to increase by 10% compared to 
the current situation. The number of flights and passengers decline by 11%, as do the 
CO2 emissions. The fiscal revenue amounts to € 463 million. The relative reduction of the 
number of direct jobs and the value added by the aviation sector is 11% for both. 
The reduction in the number of people affected by noise of 6% is in line with the 
reduction of the number of flights.  
4.23. Romania 
CURRENT TAX REGIME 
Romania does not impose a ticket tax on air passengers. The country levies a VAT of 
19% on domestic flights, but no excise duty on kerosene. 

IMPACTS 
The scenarios and the effect they have on the modelled impacts are presented in  
Table 40. 

Table 40 – Impacts per taxation scenario and change relative to the current situation for Romania 

Current 
situation 

Introduction of 
ticket tax 

Introducing VAT 
on all tickets 
(19%) 

Introducing fuel 
excise duty 

Value 

Value 

Change  Value 

Change  Value 

Change 

8.2 

176 

8 

0.2 

1.4 

7.7 

-6% 

6.7 

-18% 

7.4 

-9% 

185 

5% 

206 

17% 

190 

9% 

-6% 

-18% 

7 

-6% 

6 

-18% 

7 

-9% 

-9% 

0.2 

-6% 

0.1 

-18% 

0.2 

-9% 

1.4 

-6% 

1.2 

-18% 

1.3 

-9% 

11.2 

10.8 

-3% 

10.0 

-10% 

10.6 

-5% 

0.0 

0.1 

316% 

0.2 

882% 

0.1 

470% 

100 

100 

0% 

100 

0% 

100 

0% 

6 

6 

0% 

6 

0% 

6 

0% 

6,000 

6,000 

0% 

6,000 

0% 

6,000 

0% 

Impacts 
Aviation sector 

Passenger demand 
(million) 

Average ticket price 
(€) 

Number of flights 
and connectivity 

Employment  
(1,000 FTE) 

Value added 
(€ billion) 

CO2 emissions 
(Mton) 

People affected by 
noise (1,000) 

Aviation-related 
fiscal revenue 
(€ billion) 

Impacts on major 
suppliers 

Employment  
(1,000 FTE) 

Value added 
(€ billion) 

Impacts on all 
other sectors 

Employment  
(1,000 FTE) 

101 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Current 
situation 

Introduction of 
ticket tax 

Introducing VAT 
on all tickets 
(19%) 

Introducing fuel 
excise duty 

134 

134 

0% 

134 

0% 

134 

0% 

6,200 

6,200 

0% 

6,200 

0% 

6,200 

0% 

Value added 
(€ billion) 

Total economic 
impacts 

Employment  
(1,000 FTE) 

GDP (€ billion) 

160 

160 

0%  

160 

0%  

160 

0%  

*: The sum of value added gives the gross value added, which is equal to GDP plus taxes minus subsidies. 

In the first scenario, a ticket tax is introduced with the same structure and level as the 
German Air Transport Tax. Because most passengers fly to destinations within Europe in 
economy class and other classes, the average ticket price rises by a value that is close to 
the corresponding € 7.47 tax rate, which comes down to a 5% increase. As a result, both 
the number of passengers and the number of flights decrease by 6%. In turn, the 
decrease in passenger demand leads to a drop in both the number of direct jobs and in 
the value added of the aviation sector, which both fall by the same 6%. However, this is 
compensated by an almost equal increase in jobs in other sectors of the economy, so the 
net effect on employment is close to zero. The fiscal revenue resulting from the 
introduced ticket tax is € 94 million, compared to € 23 million in the current situation 
(generated by the current VAT). With regard to climate and environmental impacts, the 
CO2 emissions also decrease by 6%, and the number of people affected by noise by 3%. 

In the second scenario, the VAT rate of 19% that is currently levied to domestic flights 
applies to tickets for all destinations. As a result, the demand for flights by passengers 
and the number of flights decrease by 18% compared to the current situation.  
This decrease is a factor three higher than for the ticket tax, which is caused by the 
higher average ticket price increase that the VAT brings about. It also leads to a larger 
reduction of the number of direct jobs and the value added by the aviation sector of 
18%, although the overall effect on jobs and GDP is negligible. The extension of the 
VAT to all flights results in a total fiscal revenue of € 222 million. The reduction in 
CO2 emissions is 18%, and the number of people affected by noise drops by 10%. 

The introduction of a fuel excise duty of 330 €/kilolitre causes the average ticket price to 
increase by 9% compared to the current situation. The number of flights and passengers 
decline by 9%, as do the CO2 emissions. The fiscal revenue amounts to € 129 million. 
The relative reduction of the number of direct jobs and the value added by the aviation 
sector is 9% for both. The reduction in the number of people affected by noise of 5% is 
in line with the reduction of the number of flights. Thus, the impacts of this particular 
excise duty are found to be twice as small as for extending the VAT on air passenger 
tickets to all destinations, but larger than for the introduction of the ticket tax. 

102 

 
 
 
 
 
 
 
 
 
 
 
 
4.24. Slovakia 

CURRENT TAX REGIME 
Slovakia does not impose a ticket tax on air passengers. The country levies a VAT of 20% 
on domestic flights, but no excise duty on kerosene. 

IMPACTS 
The scenarios and the effect they have on the modelled impacts are presented in  
Table 41. 

Table 41 – Impacts per taxation scenario and change relative to the current situation for Slovakia 

Current 
situation 

Introduction of ticket 
tax 

Introducing VAT 
on all tickets 
(20%) 

Introducing fuel 
excise duty 

Impacts 

Value 

Value 

Change 

Value 

Change 

Value 

Change 

Aviation sector 

Passenger demand 
(million) 

Average ticket price 
(€) 

Number of flights 
and connectivity 

1.0 

174 

1.0 

-5% 

0.8 

-21% 

0.9 

-12% 

183 

5% 

208 

20% 

193 

11% 

-5% 

-21% 

-12% 

0.60 

0.57 

-6% 

0.47 

-22% 

0.53 

-12% 

0.034 

0.032 

-6% 

0.026 

-22% 

0.030 

-12% 

0.1 

1.5 

0.0 

0.1 

1.4 

-5% 

0.1 

-21% 

0.1 

-12% 

-5% 

1.2 

-20% 

1.4 

-10% 

0.01 

>>100%  0.03 

>>100%  0.02 

>>100% 

100 

100 

0% 

100 

0% 

100 

0% 

4 

4 

0% 

4 

0% 

4 

0% 

1,885 

1,885 

0% 

1,885 

0% 

1,885 

0% 

68 

68 

0% 

68 

0% 

68 

0% 

Employment  
(1,000 FTE) 

Value added 
(€ billion) 

CO2 emissions 
(Mton) 

People affected by 
noise (1,000) 

Aviation-related 
fiscal revenue 
(€ billion) 

Impacts on major 
suppliers 

Employment  
(1,000 FTE) 

Value added 
(€ billion) 

Impacts on all 
other sectors 

Employment  
(1,000 FTE) 

Value added 
(€ billion) 

Total economic 
impacts 

Employment  

1,943 

1,943 

0% 

1,943 

0% 

1,943 

0% 

(1,000 FTE) 

103 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Current 
situation 

Introduction of ticket 
tax 

Introducing VAT 
on all tickets 
(20%) 

Introducing fuel 
excise duty 

GDP (€ billion) 

79 

79 

-0% 

79 

-0%  

79 

-0%  

*: The sum of value added gives the gross value added, which is equal to GDP plus taxes minus subsidies. 

In the first scenario, a ticket tax is introduced with the same structure and level as the 
German Air Transport Tax. Because most passengers fly to destinations within Europe in 
economy class and other classes, the average ticket price rises by a value that is close to 
the corresponding € 7.47 tax rate, which comes down to a 5% increase. As a result, both 
the number of passengers and the number of flights decrease by 5%. In turn, the 
decrease in passenger demand leads to a drop in both the number of direct jobs and in 
the value added of the aviation sector, which both fall by 6%. However, this is 
compensated by an almost equal increase in jobs in other sectors of the economy, so the 
net effect on employment is close to zero. The fiscal revenue resulting from the 
introduced ticket tax is € 9 million, compared to € 1 million in the current situation 
(generated by the current VAT). With regard to climate and environmental impacts, both 
the CO2 emissions and the number of people affected by noise decrease by 5%. 

In the second scenario, the VAT rate of 20% that is currently levied to domestic flights 
applies to tickets for all destinations. As a result, the demand for flights by passengers 
and the number of flights decrease by 21% compared to the current situation.  
This decrease is a factor four higher than for the ticket tax, which is caused by the higher 
average ticket price increase that the VAT brings about. It also leads to a larger reduction 
of the number of direct jobs and the value added by the aviation sector of 22%, although 
the overall effect on jobs and GDP is negligible. The extension of the VAT to all flights 
results in a total fiscal revenue of € 28 million. The reduction in CO2 emissions is 21%, 
and the number of people affected by noise drops by 20%. 

The introduction of a fuel excise duty of 330 €/kilolitre causes the average ticket price to 
increase by 11% compared to the current situation. The number of flights and 
passengers decline by 12%, as do the CO2 emissions. The fiscal revenue amounts to 
€ 17 million. The relative reduction of the number of direct jobs and the value added by 
the aviation sector is 12% for both. The reduction in the number of people affected by 
noise of 10% is in line with the reduction of the number of flights. Thus, the impacts of 
this particular excise duty are found to be smaller than for extending the VAT on air 
passenger tickets to all destinations, but larger than for the introduction of the ticket tax. 

104 

 
 
 
 
 
 
4.25. Slovenia 

CURRENT TAX REGIME 
Slovenia does not impose a ticket tax on air passengers. The country levies a VAT of 
9.5% on domestic flights, but no excise duty on kerosene. 

IMPACTS 
The scenarios and the effect they have on the modelled impacts are presented in 
Table 42. 

Table 42 – Impacts per taxation scenario and change relative to the current situation for Slovenia 

Current 
situation 

Introduction of 
ticket tax 

Introducing VAT 
on all tickets 
(10%) 

Introducing fuel 
excise duty 

Impacts 

Value 

Value 

Change 

Value 

Change 

Value 

Change 

Aviation sector 

Passenger demand 
(million) 

Average ticket price 
(€) 

Number of flights 
and connectivity 

Employment  
(1,000 FTE) 

Value added 
(€ billion) 

CO2 emissions 
(Mton) 

People affected by 
noise (1,000) 

Aviation-related 
fiscal revenue 
(€ billion) 

Impacts on major 
suppliers 

Employment  
(1,000 FTE) 

Value added 
(€ billion) 

Impacts on all 
other sectors 

Employment  
(1,000 FTE) 

Value added 
(€ billion) 

Total economic 
impacts 

0.6 

0.6 

-3% 

0.6 

-10% 

0.6 

-5% 

322 

332 

3% 

353 

9% 

335 

4% 

-3% 

-10% 

-5% 

0.55 

0.53 

-3% 

0.49 

-10% 

0.52 

-5% 

0.025 

0.024 

-3% 

0.023 

-10% 

0.024 

-5% 

0.1 

0.1 

-3% 

0.1 

-10% 

0.1 

-5% 

n.a. 

n.a. 

n.a. 

n.a. 

n.a. 

n.a. 

n.a. 

0 

0.01 

>>100%  0.03 

>>100%  0.02 

>>100% 

19 

1 

19 

0% 

18 

0% 

19 

0% 

1 

0% 

1 

0% 

1 

0% 

700 

700 

0% 

700 

0% 

700 

0% 

32 

32 

0% 

32 

0% 

32 

0% 

Employment  

800 

800 

0% 

800 

0% 

800 

0% 

(1,000 FTE) 

105 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Current 
situation 

Introduction of 
ticket tax 

Introducing VAT 
on all tickets 
(10%) 

Introducing fuel 
excise duty 

GDP (€ billion) 

39 

39 

-0% 

39 

-0%  

39 

-0%  

*: The sum of value added gives the gross value added, which is equal to GDP plus taxes minus subsidies. 

In the first scenario, a ticket tax is introduced with the same structure and level as the 
German Air Transport Tax. Because most passengers fly to destinations within Europe in 
economy class and other classes, the average ticket price rises by a value that is close to 
the corresponding € 7.47 tax rate, which comes down to a 3% increase. As a result, both 
the number of passengers and the number of flights decrease by 3%. In turn, the 
decrease in passenger demand leads to a drop in both the number of direct jobs and in 
the value added of the aviation sector, which both fall by the same 3%. However, this is 
compensated by an almost equal increase in jobs in other sectors of the economy, so the 
net effect on employment is close to zero. The fiscal revenue resulting from the 
introduced ticket tax is € 6 million. With regard to climate and environmental impacts, 
the CO2 emissions also decrease by 3% (noise exposure data are not available). 

In the second scenario, the VAT rate of 9.5% that is currently levied to domestic flights 
applies to tickets for all destinations. As a result, the demand for flights by passengers 
and the number of flights decrease by 10% compared to the current situation. 
This decrease is a factor three higher than for the ticket tax, which is caused by the 
higher average ticket price increase that the VAT brings about. It also leads to a larger 
reduction of the number of direct jobs and the value added by the aviation sector of 
10%, although the overall effect on jobs and GDP is negligible. The extension of the VAT 
to all flights results in a total fiscal revenue of € 17 million. The reduction in CO2 
emissions is 10%. 

The introduction of a fuel excise duty of 330 €/kilolitre causes the average ticket price to 
increase by 4% compared to the current situation. The number of flights and passengers 
decline by 5%, as do the CO2 emissions. The fiscal revenue amounts to € 8 million. 
The relative reduction of the number of direct jobs and the value added by the aviation 
sector is 5% for both. Thus, the impacts of this particular excise duty are found to be 
twice as small as for extending the VAT on air passenger tickets to all destinations, but 
higher than for the introduction of the ticket tax. 

4.26. Spain 

CURRENT TAX REGIME 
Spain does not impose a ticket tax on air passengers. The country levies a VAT of 10% 
on domestic flights, except to/from the Canary Islands, Ceuta and Melilla. There is no 
excise duty on kerosene. 

106 

 
 
 
 
 
 
 
IMPACTS 
The scenarios and the effect they have on the modelled impacts are presented in  
Table 43. 

Table 43 – Impacts per taxation scenario and change relative to the current situation for Spain 

Current 
situation 

Introduction of 
ticket tax 

Introducing VAT 
on all tickets 
(10%) 

Introducing fuel 
excise duty 

Impacts 

Value 

Value 

Change  Value 

Change  Value 

Change 

Aviation sector 

Passenger demand 
(million) 

Average ticket price 
(€) 

Number of flights and 
connectivity 

Employment  
(1,000 FTE) 

Value added 
(€ billion) 

32 

2.9 

102.2 

97.0 

-5% 

94.4 

-8% 

90.9 

-11% 

230 

240 

5% 

248 

7% 

252 

10% 

-5% 

-8% 

-11% 

30 

-6% 

29 

-8% 

28 

-12% 

2.8 

-6% 

2.7 

-8% 

2.6 

-12% 

CO2 emissions (Mton)  16.8 

16.0 

-5% 

15.6 

-8% 

15.0 

-11% 

People affected by 
noise (1,000) 

130.4 

125.2 

-4% 

122.6 

-6% 

118.9 

-9% 

Aviation-related fiscal 
revenue (€ billion) 

0.4 

Impacts on major 
suppliers 

1.4 

237% 

2.1 

426% 

2.4 

487% 

Employment  
(1,000 FTE) 

Value added 
(€ billion) 

Impacts on all 
other sectors 

Employment  
(1,000 FTE) 

Value added 
(€ billion) 

Total economic 
impacts 

Employment  
(1,000 FTE) 

400 

34 

400 

0% 

400 

0% 

400 

0% 

34 

0% 

34 

0% 

34 

0% 

15,600 

15,600 

0% 

15,600 

0% 

15,600 

0% 

943 

943 

0% 

943 

0% 

943 

0% 

16,000 

16,000 

0% 

16,000 

0% 

16,000 

0% 

GDP (€ billion) 

1,080 

1,080 

-0% 

1,080 

-0%  

1,080 

-0%  

*: The sum of value added gives the gross value added, which is equal to GDP plus taxes minus subsidies. 
In the first scenario, a ticket tax is introduced with the same structure and level as the 
German Air Transport Tax. Because most passengers fly to destinations within Europe in 
economy class and other classes, the average ticket price rises by a value that is close to 
the corresponding € 7.47 tax rate, which comes down to a 5% increase. As a result, both 
the number of passengers and the number of flights decrease by 5%. In turn, the 
decrease in passenger demand leads to a drop in both the number of direct jobs and in 

107 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
the value added of the aviation sector, which both fall by 6%. However, this is 
compensated by an almost equal increase in jobs in other sectors of the economy, so 
the net effect on employment is close to zero. The fiscal revenue resulting from the 
introduced ticket tax is € 1,366 million, compared to € 406 million in the current situation 
(generated by the current VAT). With regard to climate and environmental impacts, the 
CO2 emissions also decrease by 5%, and the number of people affected by noise by 4%. 

In the second scenario, the VAT rate of 10% that is currently levied to domestic flights 
applies to tickets for all destinations. As a result, the demand for flights by passengers 
and the number of flights decrease by 8% compared to the current situation.  
This decrease is higher than for the ticket tax, which is caused by the higher average 
ticket price increase that the VAT brings about. It also leads to a larger reduction of the 
number of direct jobs and the value added by the aviation sector of 8%, although the 
overall effect on jobs and GDP is negligible. The extension of the VAT to all flights results 
in a total fiscal revenue of € 2,131 million. The reduction in CO2 emissions is 8%, and the 
number of people affected by noise drops by 6%. 

The strongest effects can be observed for the introduction of a fuel excise duty of 
330 €/kilolitre, which causes the average ticket price to increase by 10% compared to 
the current situation. The number of flights and passengers decline by 11%, as do the 
CO2 emissions. The fiscal revenue amounts to € 2,382 million. The relative reduction of 
the number of direct jobs and the value added by the aviation sector is 12% for both. 
The reduction in the number of people affected by noise of 9% is in line with the 
reduction of the number of flights.  

4.27. Sweden 

CURRENT TAX REGIME 
Sweden charges a ticket tax to all departing air passengers. There are three tax rates 
that apply to different destination bands. See Table 44. 
The tax has entried into force on April 1st, 2018. The government aims to reduce the 
number of flights per year by 450,000-600,000 per year with this tax, which should lead 
to an emissions reduction of about 2%, and thereby contribute to meeting the 
Sustainable Development Goals by 203080. 

Table 44 – Ticket tax rates in Sweden 

Ticket tax type 

Tax rate description 

Tax rate 

Air Ticket Tax 

To domestic and European destinations 

€ 6.26 (SEK 60) 

To destinations outside Europe, but 
below 6,000 km from origin 

€ 26.06 (SEK 250) 

All other destinations 

€ 41.70 (SEK 400) 

Sweden levies a VAT of 6% on domestic flights, but no excise duty on kerosene. 

80  https://nordic.businessinsider.com/sweden-is-making-flying-more-expensive-with-a-contested-airline-tax--

and-some-airlines-are-already-cancelling-routes--/  

108 

 
 
 
 
 
 
                                                 
IMPACTS 
The scenarios and the effect they have on the modelled impacts are presented in  
Table 45. 

Table 45 – Impacts per taxation scenario and change relative to the current situation for Sweden 

Current 
situation 

Abolition of ticket 
tax 

Introducing VAT 
on all tickets 
(6%) 

Introducing fuel 
excise duty 

Impacts 

Value 

Value 

Change  Value 

Change  Value 

Change 

20.9 

21.8 

4% 

20.1 

-4% 

19.2 

-8% 

245 

235 

-4% 

256 

4% 

263 

8% 

Aviation sector 

Passenger demand 
(million) 

Average ticket price 
(€) 

Number of flights and 
connectivity 

Employment  
(1,000 FTE) 

Value added 
(€ billion) 

6 

0.7 

CO2 emissions (Mton)  2.5 

People affected by 
noise (1,000) 

28.5 

Aviation-related fiscal 
revenue (€ billion) 

0.3 

Impacts on major 
suppliers 

100 

14 

Employment  
(1,000 FTE) 

Value added 
(€ billion) 

Impacts on all 
other sectors 

4% 

-4% 

-8% 

6 

4% 

6 

-4% 

5 

-8% 

0.7 

4% 

0.7 

-4% 

0.6 

-8% 

2.7 

29.4 

4% 

3% 

2.4 

-4% 

2.3 

27.6 

-3% 

26.4 

-8% 

-7% 

0.1 

-71% 

0.5 

69% 

0.6 

111% 

100 

0% 

100 

0% 

100 

0% 

14 

0% 

14 

0% 

14 

0% 

Employment  

4,500 

4,500 

0% 

4,500 

0% 

4,500 

0% 

(1,000 FTE) 

Value added 
(€ billion) 

Total economic 
impacts 

Employment  
(1,000 FTE) 

383 

383 

0% 

383 

0% 

383 

0% 

4,600 

4,600 

0% 

4,600 

0% 

4,600 

0% 

GDP (€ billion) 

449 

449 

0% 

449 

-0%  

449 

-0%  

*: The sum of value added gives the gross value added, which is equal to GDP plus taxes minus subsidies. 

In the first scenario, the current ticket tax is abolished. This causes the average ticket 
price to decrease by 4%. As a result, both the number of passengers and the number of 
flights increase by 4%. In turn, the increase in passenger demand leads to an increase in 
both the number of direct jobs and in the value added of the aviation sector, which both 

109 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
rise by the same 4%. However, this is compensated by an almost equal decrease in jobs 
in other sectors of the economy, so the net effect on employment is close to zero. 
The fiscal revenue resulting from the ticket tax abolition is € 83 million (generated by the 
current VAT on air tickets), which is much lower than than the € 289 million in the 
current situation. With regard to climate and environmental impacts, the CO2 emissions 
also increase by 4%, and the number of people affected by noise by 3%. 

In the second scenario, the VAT rate of 6% that is currently levied to domestic flights 
applies to tickets for all destinations. As a result, the demand for flights by passengers 
and the number of flights decrease by 4% compared to the current situation. This results 
in a reduction of the number of direct jobs and the value added by the aviation sector of 
4%, although the overall effect on jobs and GDP is negligible. The fiscal revenue 
increases to € 489 million, due to the extension of the VAT to all flights. The reduction in 
CO2 emissions is 4%, and the number of people affected by noise drops by 3%. 
Comparing these results with the first scenario, we can see that the effects of the VAT 
introduction are similar in size as the effects of the ticket tax abolition, but in the 
opposite direction. 

The introduction of a fuel excise duty of 330 €/kilolitre causes the average ticket price to 
increase by 8% compared to the current situation. The number of flights and passengers 
decline by 8%, as do the CO2 emissions. The fiscal revenue amounts to € 610 million. 
The relative reduction of the number of direct jobs and the value added by the aviation 
sector is 8% for both. The reduction in the number of people affected by noise of 7% is 
in line with the reduction of the number of flights. Thus, the impacts of this particular 
excise duty are found to be higher than for both the VAT scenario and the (oppositely 
directed) ticket tax abolition scenario. 

4.28. United Kingdom 

CURRENT TAX REGIME 
The ticket tax in the UK is called the UK Air Passenger Duty, and is charged to all 
passengers departing from UK airports on board aircraft with a maximum takeoff weight 
(MTOW) of more than 20 tonnes. The tax applies to both domestic and international 
flights. The tax value depends on the aircraft (MTOW, seat pitch, and number of seats) 
and the distance of the capital city of the destination country or territory from London. 
There are six tax rates in total, see Table 46. 

Table 46 – UK ticket tax rates 

Tax rate 

Description 

Band A – Reduced rate  < 2,000 miles, lowest class, seat pitch  
< 40 inches 

Value 

€ 14.42 

Band A – Standard rate  < 2,000 miles, all other classes, seat pitch  

€ 28.85 

> 40 inches 

Band A – Higher rate 

< 2,000 miles, aircraft > 20 tonnes for  
< 19 passengers 

Band B – Reduced rate  > 2,000 miles, lowest class, seat pitch  
< 40 inches 

€ 86.54 

€ 83.21 

Band B – Standard rate  > 2,000 miles, all other classes, seat pitch  

€ 166.41 

> 40 inches 

Band B – Higher rate 

> 2,000 miles, aircraft > 20 tonnes for  
< 19 passengers 

€ 499.24 

There are two destination bands. In Band A the distance from London to the capital of 
the destination country or territory is between 0 to 2,000 miles (3,218.7 kilometres);  

110 

 
 
 
 
 
 
in Band B the distance is higher than 2,000 miles. There are three rates of duty for each 
destination band. The ‘reduced rate’ applies to the lowest class of travel available in the 
plane for seat pitches below 40 inches (1.016 metres). The ‘standard rate’ applies to all 
other classes of travel, or to seats with a pitch above 40 inches. The ‘higher rate’ applies 
to airplanes that weigh 20 tonnes or more and carry fewer than 19 passengers 81. 

Transfer passengers and passengers travelling from the Channel Islands and the Scottish 
Highlands and Islands region are exempted from the UK ticket tax. Passengers departing 
from Northern Ireland do not pay the ticket tax in case of direct long-haul flights, i.e., 
flights to a destination outside Band A. Furthermore, passengers in emergency and public 
service flights do not pay this tax. 

There is neither a VAT on air tickets in the UK nor an excise duty. 

IMPACTS 
The scenarios and the effect they have on the modelled impacts are presented in  
Table 47. 

Table 47 – Impacts per taxation scenario and change relative to the current situation for the UK 

Current 
situation 

Abolition of ticket 
tax 

Introducing VAT 
on all tickets 
(19%) 

Introducing fuel 
excise duty 

Impacts 

Value 

Value 

Change 

Value 

Change  Value 

Change 

Aviation sector 

Passenger demand 
(million) 

Average ticket price 
(€) 

Number of flights 
and connectivity 

Employment  
(1,000 FTE) 

Value added 
(€ billion) 

CO2 emissions 
(Mton) 

People affected by 
noise (1,000) 

Aviation-related 
fiscal revenue 
(€ billion) 

Impacts on major 
suppliers 

Employment  
(1,000 FTE) 

Value added 
(€ billion) 

116.4 

126.5 

9% 

93.3 

-20% 

102.8 

-12% 

393 

362 

-8% 

468 

19% 

432 

11% 

9% 

-20% 

-12% 

75 

82 

9% 

60 

-20% 

66 

-12% 

12.8 

13.9 

9% 

10.3 

-20% 

11.3 

-12% 

34.0 

36.9 

9% 

27.2 

-20% 

30.0 

-12% 

1,084.7 

1,143.8 

5% 

926.7 

-15% 

996.0 

-8% 

3.7 

0.0 

-100% 

10.5 

186% 

7.3 

97% 

700 

700 

0% 

700 

0% 

700 

0% 

75 

75 

0% 

75 

0% 

75 

0% 

81   https://www.gov.uk/guidance/rates-and-allowances-for-air-passenger-duty  

111 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
Current 
situation 

Abolition of ticket 
tax 

Introducing VAT 
on all tickets 
(19%) 

Introducing fuel 
excise duty 

25,900 

25,800 

0% 

25,900 

0% 

25,900 

0% 

2,233 

2,232 

0% 

2,236 

0% 

2,235 

0% 

26,600 

26,600 

0% 

26,600 

0% 

26,600 

0% 

Impacts on all 
other sectors 

Employment  
(1,000 FTE) 

Value added 
(€ billion) 

Total economic 
impacts 

Employment  
(1,000 FTE) 

GDP (€ billion) 

2,602 

2,602 

-0% 

2,602 

0%  

2,602 

0%  

*: The sum of value added gives the gross value added, which is equal to GDP plus taxes minus subsidies. 

In the first scenario, the current ticket tax is abolished. This causes the average ticket 
price to decrease by 8%. As a result, both the number of passengers and the number of 
flights increase by 9%. In turn, the increase in passenger demand leads to an increase in 
both the number of direct jobs and in the value added of the aviation sector, which both 
rise by the same 9%. However, this is compensated by an almost equal decrease in jobs 
in other sectors of the economy, so the net effect on employment is close to zero. 
The fiscal revenue resulting from the ticket tax abolition drops to zero, as the UK does 
not levy a VAT on flight tickets. This is a large reduction compared to the € 3.7 billion 
that is raised in the current situation. With regard to climate and environmental impacts, 
the CO2 emissions also increase by 9%, and the number of people affected by noise by 
5%. 

The VAT rate that is applied to the second scenario is based on the standard VAT rate on 
international transport tickets in the UK, which is 19%. If this VAT rate were introduced 
on tickets for all destinations, the demand for flights by passengers and the resulting 
number of flights would decrease by 20% compared to the current situation. This results 
in a reduction of the number of direct jobs and the value added by the aviation sector of 
20%, although the overall effect on jobs and GDP is negligible. The introduction of the 
VAT creates an additional fiscal revenue of € 6.8 billion (creating a total fiscal revenue of 
€ 10.5 billion), which is more than the current ticket tax generates. The reduction in 
CO2 emissions is 20%, and the number of people affected by noise drops by 15%. 
Comparing these results with the first scenario, we can see that the effects of the VAT 
introduction are more than twice as large as the effects of the ticket tax abolition, but in 
the opposite direction. 

The introduction of a fuel excise duty of 330 €/kilolitre causes the average ticket price to 
increase by 11% compared to the current situation. The number of flights and 
passengers decline by 12%, as do the CO2 emissions. The fiscal revenue amounts to 
€ 7.3 billion. The relative reduction of the number of direct jobs and the value added by 
the aviation sector is 12% for both. The reduction in the number of people affected by 
noise of 8% is in line with the reduction of the number of flights. Thus, the impacts of 
this particular excise duty are found to be smaller than for the VAT on flight tickets, and 
higher than for the (oppositely directed) abolition of the ticket tax. 

112 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
4.29. EU28  

CURRENT TAX REGIME 
There is no EU-wide taxation regime, hence we determined the impacts on the EU28 by 
aggregating the taxation and other data from each MS. In effect the model treats the 
EU28 as if it is a single country.  

The weighted average ticket tax for the EU28 is around € 11 per ticket, while the average 
VAT is around € 4 per ticket. Neither excise duty nor VAT is levied EU-wide. 

IMPACTS 
The scenarios and the effect they have on the modelled impacts are presented in  
Table 48. 

Table 48 – Impacts per taxation scenario and change relative to the current situation for the EU28 

Current 
situation 

Abolition of ticket 
tax 

Introducing VAT 
on all tickets 
(19%) 

Introducing fuel 
excise duty 

Impacts 

Value 

Value 

Change 

Value 

Change  Value 

Change 

Aviation sector 

Passenger demand 
(million) 

Average ticket price 
(€) 

Number of flights 
and connectivity 

Employment  
(1,000 FTE) 

Value added 
(€ billion) 

CO2 emissions 
(Mton) 

People affected by 
noise (1,000) 

Aviation-related 
fiscal revenue 
(€ billion) 

Impacts on major 
suppliers 

Employment  
(1,000 FTE) 

Value added 
(€ billion) 

Impacts on all 
other sectors 

Employment  
(1,000 FTE) 

Value added 
(€ billion) 

Total economic 
impacts 

691.5 

718.5 

4% 

570.4 

-18% 

616.0 

-11% 

304 

293 

-4% 

358 

17% 

333 

10% 

362 

43.4 

376 

45.1 

4% 

4% 

4% 

-18% 

-11% 

296 

-18% 

321 

-11% 

35.6 

-18% 

38.5 

-11% 

149.5 

155.3 

4% 

123.3 

-18% 

133.1 

-11% 

2,851.5 

2,919.8 

2% 

2,495.9 

-12% 

2,637.1 

-8% 

10.0 

2.6 

-74% 

39.9 

297% 

26.9 

168% 

5,100 

5,100 

0% 

5,100 

0% 

5,100 

0% 

527 

527 

0% 

525 

0% 

526 

0% 

188,300 

188,300 

0% 

188,500 

0% 

188,400 

0% 

12,672 

12,670 

0% 

12,680 

0% 

12,677 

0% 

113 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Current 
situation 

Abolition of ticket 
tax 

Introducing VAT 
on all tickets 
(19%) 

Introducing fuel 
excise duty 

193,800 

193,800 

0% 

193,900 

0% 

193,900 

0% 

Employment  
(1,000 FTE) 

GDP (€ billion) 

14,798 

14,798 

 0% 

14,797 

 -0%  

14,797 

 -0%  

In the first scenario, the average EU ticket tax is abolished, or in other words the current 
ticket taxes levied in some MS are abolished. This causes the average ticket price to 
decrease by 4% resulting in the number of passengers and flights increasing by 4%.  
The effect is relatively small owing to the fact that a minority of MS currently levy ticket 
taxes. In turn, the increase in passenger demand leads to an increase in both the 
number of direct jobs and in the value added of the aviation sector, which both rise by 
4%. However, this is compensated by an almost equal decrease in jobs in other sectors 
of the economy, so the net effect on total employment is close to zero. The fiscal revenue 
resulting from the ticket tax abolition drops by 74%, from € 10 billion EU-wide to  
€ 2.6 billion, with the remainder resulting from domestic VAT levied in some Member 
States. With regards to climate and environmental impacts, the CO2 emissions increase 
by 4% to 155.3 Mton CO2, and the number of people affected by noise increases by 2%. 

The VAT rate that is applied to the second scenario is based on Germany’s VAT rate of 
19% for domestic flights. If this VAT rate were introduced on tickets for all destinations, 
the demand for flights by passengers and the resulting number of flights would decrease 
by 18% compared to the current situation. This results in a reduction of the number of 
direct jobs and the value added by the aviation sector of 18%, although the overall effect 
on jobs and GDP is negligible. The introduction of the VAT increases the aviation-related 
fiscal revenue EU-wide from € 10 billion to € 40 billion. The reduction in CO2 emissions is 
18%, and the number of people affected by noise drops by 12%. Comparing these 
results with the first scenario, we can see that the effects of the VAT introduction are 
more than three times as large as the effects of the ticket tax abolition, but in the 
opposite direction. 

The introduction of a fuel excise duty of 330 €/kilolitre causes the average ticket price to 
increase by 10% compared to the current situation. The number of flights and 
passengers decline by 11%, as do the CO2 emissions, while the number of people 
affected by noise declines by 8%. The aviation-related fiscal revenue increases from 
€ 10 billion to € 27 billion, while on the other hand there is a relative reduction of 11% in 
the number of direct jobs and the value added by the aviation sector. Thus, the impacts 
of this particular excise duty are found to be smaller than for the VAT on flight tickets, 
and higher than for the (oppositely directed) abolition of the ticket tax. 

114 

 
 
 
 
 
 
 
5. Conclusions 

One of the main aims of this study was to assesses in detail how taxes are collected and 
what they are used for. Although many countries exempt aviation from all taxes, a 
number of countries levy taxes on some aviation activities. In EU Member states, VAT or 
other taxes on domestic aviation are the most prevalent and exist in 17 Member States. 
Six Member States levy taxes on international aviation, invariably in the form of ticket 
taxes for passengers departing from airports in the Member State. 

Outside the EU, 13 mandate countries, as well as Australia, Canada, the United States, 
Hong Kong, Brazil and Japan all tax aviation activities. In most cases, the taxes are ticket 
or departure taxes, i.e. a fixed amount per passenger, sometimes depending on the 
destination or class of travel. Some countries levy VAT or sales taxes, i.e. a levy 
proportional to the value of the ticket. This is done, for example, in Japan, Mexico, the 
USA and Canada. 

Fuel on domestic flights is sometimes taxes, e.g. in the USA. In contrast, fuel used on 
international flights is generally exempt from fuel taxes. 

Taxes lower demand and have economic and environmental impacts. This study has 
developed a model to assess certain impacts of the introduction or abolition of a ticket 
tax, VAT, or a fuel excise duty on EU Member States. Due to data constraints, it could 
model the impacts for 24 Member States. 

A fuel excise duty is chosen as an example to illustrate the results because it could have 
the same rate in all countries, viz. the minimum rate for kerosene from the Energy 
Taxation Directive (which exempts kerosene used in international aviation). 

The calculated impacts on ticket prices range from 3-19%, although in most Member 
States it is close to 10%. The reasons for the differences are partly due to the different 
level of ticket prices in EU Member States, but also point to constraints of the model: 
when a country has a high share of international transfer passengers or freight flights, 
the impacts are overestimated. 

As a result of the impact on ticket prices, the demand for aviation is reduced. The impact 
depends on the price elasticity of demand which, amongst others, depends on the share 
of intercontinental and intra-European flights. In most countries, a 10% increase in ticket 
prices results in a 9–11% lower demand. This corresponds to a similar reduction in the 
number of flights. 

In general, introduction of a tax that increases the ticket prices by 10% has no net 
impacts on jobs. The negative impacts on employment in the aviation sector and 
suppliers are offset by positive impacts in other sectors caused by increased fiscal 
revenue, which either results in higher government spending, or results in lower taxes 
and increases demand of households or businesses. 

The impact on GDP are composed of a reduction in value added in aviation sector and 
supplying sectors, and an increase of value added in other sectors because the tax raises 
fiscal revenue that either results in increased government expenditure or lower taxes and 
increased spending by households and companies. The balance depends on structure of 
the economy and varies per Member State. The introduction of an excise duty on fuel has 
an impact of less than 0.1% for most Member States, although some outliers have a 
contraction of GDP by 0.6% or an increase of 0.7%.  

Because lower demand reduces the number of flights, emissions and noise are reduced 
as well. In this case by 9–11% in most Member States. 

115 

 
 
 
 
 
 
 
 
 
 
 
As a conclusion, the analysis showcases that new or increased aviation taxes would 
generally have a negative impact on the aviation industry (lower direct employment and 
direct value added) but its impact on the overall employment within a Member State, on 
fiscal revenue and GDP would be close-to-zero. New or increased taxes would reduce the 
number of passengers and flights as well as the environmental impacts. This way, any 
changes in tax regimes must be carefully analysed especially because the role of aviation 
as a priority industry varies by Member States. 

116 

 
 
 
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[Accessed 2018]. 

Seely, A., 2012. Air passenger duty : introduction. [Online]  
Available at: 
http://researchbriefings.files.parliament.uk/documents/SN00413/SN00413.pdf 
[Accessed 2018]. 

SEO, 2016. Economic benefits of European airspace modernization, Amsterdam: SEO 
Amsterdam Economics. 

Steer Davies Gleave, 2015. Study on the Cost and Contribution of the Rail Sector, final 
report, Brussels: European Commission Directorate General for Mobility and Transport. 

The Financial Times, 2017. “How big a problem is overbooking on airlines?”. [Online]  
Available at: https://www.ft.com/content/e4cb5744-1e9d-11e7-a454-ab04428977f9 
[Accessed 2018]. 

The Guardian, 2016. Passengers using Dubai airports to pay new tax. [Online]  
Available at: https://www.theguardian.com/world/2016/mar/31/passengers-using-dubai-
airport-to-pay-new-tax 
[Accessed 2018]. 

VDB LOI CO., LTD, 2016. Laos Tax Booklet 2016. [Online]  
Available at: http://www.vdb-loi.com/wp-content/uploads/2017/04/Lao-Tax-Booklet-
2016.pdf 
[Accessed 2018]. 

Vienna International Airport, 2018. Airport Charges Regulations effective January 1st, 
2018. [Online]  
Available at: https://www.viennaairport.com/jart/prj3/va/uploads/data-
uploads/Charges%20Regulations%202018.pdf 
[Accessed 2018]. 

Vivid Economics, 2007. A Study to Estimate Ticket Price Changes for Aviation in the EU 
ETS, London: Defra, Climate Change Economics Division. 

VJG The Gas Specialist, 2015. Environment tax increase will not raise gasoline retail price 
in Vietnam. [Online]  
Available at: http://vijagas.vn/en/environment-tax-increase-will-not-raise-gasoline-
retail-price-in-vietnam-official.html 
[Accessed 2018]. 

Wizz Air Holding plc, 2016. Annual Report and Accounts 2016. [Online]  
Available at: 
https://cdn.static.wizzair.com/static/downloads/ipo/Wizz_Air_Holdings_Plc_Annual_repor
t_and_accounts_2016.pdf 
[Accessed 2018]. 

123 

 
A  Overview of taxes 

Country 

Name of Tax 

Austria 

Flugabgabe/ 
Austria Air 
Transport Levy 

U
E

Year of 
intro-
duction 
2011 

Tax rate (per 
passenger, 
except VAT) 
€ 7 (short haul) 
€ 15 (medium haul 
/selection of 
destinations) 
€ 35 (other long 
haul) 

VAT 

Belgium 

No aviation tax 

Bulgaria 

No aviation tax 

Croatia 

VAT 

10% 

25% 

Croatia Civil 
Aviation Authority 
CCAA Tax 

2010 

€ 1.37 

Cyprus 

No aviation tax 

Czech 
Republic 

VAT 

Embarkation tax 

15% (domestic 
flights only) 
€ 19.26 (domestic) 
€ 22.42 (other) 

Denmark 

No aviation tax 

Estonia 

VAT 

Finland 

VAT 

20% 

10% 

France 

VAT 

10%  

France Civil 
Aviation Tax 

Air Passenger 
Solidarity Tax 

2006 

€ 4.48 
(domestic/EU) 
€ 8.06  
(all other) 
€ 1.33  
per ton of freight 
€ 1.13  
(within EEA 82; 
economy class) 
€ 11.27  
(within EEA; 
business/first 
class) 
€ 4.51  
(outside EEA; 
economy class) 

Exemptions 

Notes 

Rates will be 
reduced by 
50% effective 
1 January 
2018 

Not 
considered as 
tax (levied by 
civil aviation 
authority) 

Not 
considered as 
tax: levied by 
airport 
authority to 
fund aviation-
related 
services or 
infrastructure 

Transfer/ 
transit pax 
continuing to 
another 
destination 
within 
24 hours 
International 
flights 

International 
flights 

International 
flights 
(Includes 
domestic/intl 
connections) 
International 
flights 
(Includes 
domestic/intl 
connections) 
(domestic 
flights only) 
Transfer pax 

Transfer pax 

82   See Annex B for a definition of countries. 

124 

 
 
 
  
 
 
 
  
 
 
 
 
  
 
 
 
 
  
 
 
  
  
  
  
 
 
 
 
  
 
 
 
  
  
  
  
  
 
 
 
 
  
 
 
  
 
 
  
 
 
  
 
 
 
  
 
 
                                                 
Country 

Name of Tax 

Year of 
intro-
duction 

Airport Tax 

2013 

Tax rate (per 
passenger, 
except VAT) 
€ 45.07  
(outside EEA; 
business/first 
class) 

€ 10.85  
(domestic) 
€ 12.75 
(international) 

Exemptions 

Notes 

40% reduction 
for transfer/ 
transit pax 

Not 
considered as 
tax: its 
purpose is to 
finance fire 
services, bird 
strike 
prevention, 
safety and 
environmenta
l monitoring 

Fiscal Tax 
(Corsica) 

Germany 

VAT 

Luftverkehrsteuer
/German Air 
Transport Tax 

2012 

€ 4.57 (for all 
passengers 
to/from Corsica) 
19% 

€ 7.47 (short haul) 
€ 23.32 (medium 
haul/selection of 
destinations) 
€ 41.99  
(other long haul) 

Greece 

VAT 

Hungary 

Hungary Airport 
Departure Tax 

10% 

€ 25.30 

Ireland 

No aviation tax 

Italy 

VAT 

10% 

International 
flights 
Transfer 
passengers 
with transfer 
< 12h for 
annex 1 
countries or 
< 24h for 
annex 2 
countries 
International 
flights 

International 
flights 

Italy Embarkation 
Tax 

Italy City Council 
Tax 

Latvia 

VAT 

Lithuania 

Lithuania Airport 
Tax 

Luxembourg  No aviation tax 

Malta 

VAT 

Netherlands 

No aviation tax 

Poland 

VAT 

Rates for FCO 
€ 17.77 (EU) 
€ 28.41 (Long 
haul) 

€ 6.50 (all other 
airports) 
€ 7.50 (Rome 
Airports) 
12% (domestic 
flights only) 
€ 6.37 

18% 

8% 

International 
flights 

International 
flights 

Not 
considered as 
tax: revenues 
are used to 
fund aviation-
related 
services 

Not 
considered as 
tax: revenues 
are used to 
fund aviation-
related 
services 

125 

 
 
  
  
  
 
 
 
 
  
 
 
  
 
 
  
 
 
  
  
  
  
 
 
 
 
  
 
 
  
 
 
 
 
  
 
 
 
 
  
 
 
 
  
  
  
  
 
 
 
 
  
 
 
  
 
 
 
 
  
 
 
Country 

Name of Tax 

Year of 
intro-
duction 

Poland airport tax 

Tax rate (per 
passenger, 
except VAT) 
PLN48.60 
(domestic) 
PLN65 
(international) 
PLN70 
(intercontinental) 

Portugal 

VAT 

6% 

Exemptions 

Notes 

International 
flights 
Flights to/from 
Madeira and 
Azores 

Security tax 

€ 3.47 
(domestic/short 
haul) 
€ 6.94 
(intercontinental) 

Romania 

VAT 

20% 

International 
flights 

Airport Departure 
Tax 

€ 5.07  
(domestic) 
€ 10.40 
(international) 

Slovakia 

VAT 

20% 

International 
flights 

Slovakia 
Embarkation Tax 

€ 6.64  
(domestic) 
€ 16.27 
(international) 

Slovenia 

No aviation tax 

Spain 

VAT 

10% 

Security tax 

€ 3.63 

Sweden 

VAT 

6% 

2018 
(April) 

United 
Kingdom 

Air Passenger 
Duty 

2007 

SEK60 
(domestic/EU) 
SEK250  
(ICA < 6,000 km) 
SEK400 (all other) 
GBP13  
(lowest class 
< 2,000 miles) 
GBP26  
(all other classes  
< 2,000 miles) 
GBP78 (aircraft  
> 20 tonnes for  
< 19 pax;  
< 2,000 miles) 
GBP75  
(lowest class 
> 2,000 miles) 

International 
flights 
Flights to/from 
Canary 
Islands, Ceuta 
and Melilla 

International 
flights 

Transfer pax 
Passengers 
travelling from 
Channel 
Islands 

Not 
considered as 
tax: revenues 
are used to 
fund aviation-
related 
services 

Not 
considered as 
tax, revenues 
are used to 
finance 
security 
services 

Not 
considered as 
tax: revenues 
are used to 
fund aviation-
related 
services 

Not 
considered as 
tax: revenues 
are used to 
fund aviation-
related 
services 

Not 
considered as 
tax, revenues 
are used to 
finance 
security 
services 

Aviation tax 
will be 
installed as of 
1 April 2018 

126 

 
 
  
  
  
  
  
 
 
  
 
 
 
  
 
 
  
  
  
  
  
 
 
  
  
  
  
  
 
 
 
 
  
 
 
  
  
  
  
  
 
 
  
 
 
 
  
 
Country 

Name of Tax 

Year of 
intro-
duction 

Exemptions 

Notes 

Tax rate (per 
passenger, 
except VAT) 
GBP150  
(all other classes 
> 2,000 miles) 
GBP450  
(aircraft  
> 20 tonnes for  
< 19 pax ;  
< 2,000 miles) 

Iceland 

No aviation tax 

Norway 

VAT 

10% 

Norway Air 
Passenger Tax 

2016 

NOK82 (€ 8.77) 

Switzerland 

VAT 

8% 

A
E
E

H
C

s
r
e
t
s
u
l
c
n
o

i
t
a
i
v
a
r
a
l
i

m
S

i

Canada 

Canadian Goods 
and Services Tax 

Canadian 
Harmonized Sales 
Tax 
Quebec sales tax 

US Transportation 
Tax 

US International 
Departure Tax 
Embarkation fee 
(domestic) 

United 
States 

Brazil 

Hong Kong 

Australia 

Japan 

Embarkation fee 
(international) 
Hong Kong Air 
Passenger 
Departure Tax 

Australian Goods 
and Services Tax 
Australia 
Passenger 
Movement Charge 
Japan 
Consumption Tax 

International 
flights 
Transfer 
passengers 
Children under 
2 
Airline 
employees 
travelling on 
business 
International 
flights 

Flights other 
than domestic/ 
USA 

International 
flights 
Flights to 
Canada and 
Mexico 

Children under 
12 
Transfer 
passengers 
International 
flights 

Rates differ 
by state 

Differs per 
airport (4 
categories) 

5% 

0-10% 

9.98% 

7.5% 

USD 18 ; € 15.04 

BRL 18.62/€ 7.99 
(CAT1) 
BRL 15.42/€ 6.62 
(CAT2) 
BRL 11.58/€ 4.97 
(CAT3) 
BRL 8.01/€ 3.44 
(CAT4) 
USD 36/€ 30.70 

€ 12.85 
HKD120 

10% 

AUD 60/€ 40.28 

8% 

International 
flights 

127 

 
 
 
  
  
  
 
  
 
 
  
  
 
 
  
 
 
 
 
                   
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
 
Country 

Name of Tax 

Year of 
intro-
duction 

Tax rate (per 
passenger, 
except VAT) 

Exemptions 

Notes 

Armenia 

State Tax 
(international) 

Bahrain 

Bahrain 
Passenger Service 
Fee International 

AMD 10,000/ 
€ 18.05 

€ 15.71 
BHD 7 

China 

China Airport Fee 
(domestic) 

CNY 60/€ 6.36 

China Airport Fee 
(international) 

Kuwait 

Kuwait Airport 
Departure Tax 

CNY 90/€ 11.44 

KWD 3/€ 6.27 

s
e
i
r
t
n
u
o
c

e
t
a
d
n
a
M

Mexico 

Mexico Airport 
Departure Tax 
Tua Domestic 

Mexico Airport 
Departure Tax 
Tua International 

Mexico 
Transportation 
Tax IVA Domestic 
Mexico Tourism 
Tax Derecho No 
Inmigrante 
Mexico 
Transportation 

€ 16.25 

€ 37.53 

4-16% 

€ 23.45 

4% 

83   http://www.ebeijing.gov.cn/QA/all_questions/t1068430.htm  

International 
flights 

Stated tax 
purpose 
remains 
unclear. It 
appears that 
the tax is 
levied to 
defray cost 
for passenger 
services, and 
is as such not 
considered a 
tax 
Chinese 
airport fee 
has as stated 
purpose 
“airport 
development 
fee” 83, and is 
used for 
infrastructure 
development. 
Not 
considered as 
a tax 
Idem as 
above 

Stated tax 
purpose 
remains 
unclear. It 
appears that 
the tax is 
levied to 
defray cost 
for passenger 
services, and 
is as such not 
considered a 
tax 
Not 
considered as 
tax: revenues 
are used to 
fund aviation-
related 
services 
Not 
considered as 
tax: revenues 
are used to 
fund aviation-
related 
services 
Differs per 
airport 

128 

 
 
 
 
                             
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
Country 

Name of Tax 

Year of 
intro-
duction 

Tax rate (per 
passenger, 
except VAT) 

Exemptions 

Notes 

Oman 

Tax IVA 
International 
Oman Airport Tax 
Domestic 

€ 4.36 

Qatar 

Oman Airport Tax 
International 
Qatar Airport Fee 
International 

Saudi Arabia  No aviation tax 

Turkey 

No aviation tax 

United Arab 
Emirates 

United Arab 
Emirates 
Passenger 
Facilities Charge 

Brunei 

No aviation tax 

Cambodia 

No aviation tax 

Indonesia 

VAT 

Laos 

No aviation tax 

Malaysia 

Myanmar 

Malaysia Goods 
and Services Tax 
No aviation tax 

Philippines 

No aviation tax 

Singapore 

Singapore 
Aviation Levy 

N
A
E
S
A

Thailand 

VAT 

Thai international 
departure/arrival 
fee 

€ 21.76 

€ 9.26 

 € 7.96 
AED 35 

10% 

6% 

€ 3.79 
SGD 6.10 

7% 

€ 0.76 

Vietnam 

VAT 

10% 

Stated tax 
purpose 
remains 
unclear. It 
appears that 
the tax is 
levied to 
defray cost 
for passenger 
services, and 
is as such not 
considered a 
tax 
Idem as 
above 
Idem as 
above 

Stated tax 
purpose 
remains 
unclear. It 
appears that 
the tax is 
levied to 
defray cost 
for passenger 
services, and 
is as such not 
considered a 
tax 

Paid twice 
(upon 
departure and 
arrival) 

International 
flights 

International 
flights 

International 
flights 

129 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
  
 
                   
  
  
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
  
 
 
B  VAT Rules used in scenarios 

Country 

Austria 

Belgium 

Bulgaria 

Croatia 

Cyprus 

Czech Republic 

Denmark 

Estonia 

Finland 

France 

Germany 

Greece 

Hungary 

Ireland 

Italy 

Latvia 

Lithuania 

Luxembourg 

Malta 

Netherlands 

Poland 

Portugal 

Romania 

Slovakia 

Slovenia 

Spain 

Sweden 

United Kingdom 

Effective  rate  (domestic  flights  only, 
unless stated otherwise) 

VAT on other passenger transport 

13% 

0% 

0% 

25% 

0% 

15% 

0% 

20% 

10% 

10% 

19% 

24% 

27% 

0% 

10% 

12% 

9% 

3% 

0% 

21% 

8% 

6% 

19% 

20% 

9,5% 

10% 

6% 

0% 

6% 

20% 

9% 

25% 

0%* 

18% 

0%* 

*   In case no VAT is levied on other modes of international passenger transport the German VAT rate on 

domestic flights is used. 

130 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
C  Regional breakdown for tax rates 

C.1  Austria Air Transport Levy 

Short range 

Medium range 

Armenia 

Albania 

Algeria 

Andorra 

Austria 

Belarus 

Belgium 

Bosnia and Herzegovina 

Bulgaria 

Croatia 

Czech Republic 

Cyprus 

Denmark 

Germany 

Egypt 

Estonia 

Finland 

France 

Georgia 

Gibraltar 

Greece 

Guernsey 

Hungary 

Ireland 

Italy 

Isle of Man 

Israel 

Jersey 

Jordan 

Latvia 

Liechtenstein 

Lithuania 

Luxembourg 

Lebanon 

Libya 

Malta 

Macedonia 

Moldova 

Montenegro 

Monaco 

Netherlands 

Norway 

Poland 

Portugal 

Romania 

Russian Federation 

San Marino 

Slovenia 

Sweden 

Switzerland 

Serbia 

Afghanistan 

Azerbaijan 

Bahrain 

Benin 

Burkina Faso 

Burundi 

Cameroon 

Cape Verde 

Central African Republic 

Chad 

Cote D’Ivoire 

Djibouti 

Eritrea 

Equatorial Guinea 

Ethiopia 

Gabon 

Gambia 

Ghana 

Guinea 

Guinea Bissau 

India 

Iraq 

Iran 

Iceland 

Kazakhstan 

Kenya 

Kyrgyzstan 

Democratic Republic of the Congo 

Congo 

Kuwait 

Liberia 

Mali 

Morocco 

Mauritania 

Niger 

Nigeria 

Oman 

Pakistan 

Qatar 

Rwanda 

Sao Tome and Principe 

Saudi Arabia 

Senegal 

Sierra Leone 

Somalia 

Sudan 

Tajikistan 

Togo 

Turkmenistan 

Uganda 

Uzbekistan 

131 

 
Medium range 

United Arab Emirates 

Yemen 

Short range 

Slovakia 

Spain 

Syria 

Tunisia 

Turkey 

Ukraine 

United Kingdom 

C.2  French Air Passenger Solidarity Tax/Civil Aviation Tax 

Countries where reduced rates apply 

Austria 

Belgium 

Bulgaria 

Croatia 

Cyprus 

Lithuania 

Luxembourg 

Malta 

Martinique 

Mayotte 

Czech Republic 

Netherlands 

Denmark 

New Caledonia 

Estonia 

Finland 

France 

French Guiana 

Norway 

Poland 

Portugal 

Reunion 

French Polynesia 

Romania 

Germany 

Greece 

Guadeloupe 

Hungary 

Iceland 

Ireland 

Italy 

Latvia 

Saint Pierre and Miquelon 

Slovakia 

Slovenia 

Spain 

Sweden 

Switzerland 

United Kingdom 

C.3  German Air Transport Tax 

Short range (Annex 1 Countries) 

Medium range (Annex 2 Countries) 

Albania 

Algeria 

Andorra 

Austria 

Belgium 

Belarus 

Bosnia and Herzegovina 

Bulgaria 

Denmark 

Germany 

Estonia 

Finland 

France 

Macedonia 

Gibraltar 

Greece 

Ireland 

Iceland 

Italy 

Croatia 

Cyprus 

Czech Republic 

Afghanistan 

Armenia 

Azerbaijan 

Bahrain 

Benin 

Burkina Faso 

Cameroon 

Cape Verde 

Central African Republic 

Chad 

Djibouti 

Egypt 

Equatorial Guinea 

Eritrea 

Ethiopia 

Gabon 

Gambia 

Georgia 

Ghana 

Guinea Bissau 

Iran 

Iraq 

132 

 
 
 
 
 
 
 
 
 
 
Short range (Annex 1 Countries) 

Medium range (Annex 2 Countries) 

Latvia 

Libya 

Liechtenstein 

Lithuania 

Luxembourg 

Malta 

Moldova 

Morocco 

Monaco 

Montenegro 

Netherlands 

Norway 

Poland 

Portugal 

Romania 

Israel 

Ivory Coast (Cote d'Ivoire) 

Jordan 

Kazakhstan 

Kuwait 

Kyrgyzstan 

Lebanon 

Liberia 

Mali 

Mauritania 

Niger 

Nigeria 

Oman 

Pakistan 

Palestinian Territories 

Russian Federation 

Qatar 

San Marino 

Sweden 

Switzerland 

Serbia 

Slovakia 

Slovenia 

Spain 

Turkey 

Tunisia 

Ukraine 

Hungary 

Sao Tome and Principe 

Saudi Arabia 

Senegal 

Sierra Leone 

Sudan 

Syria 

Tajikistan 

Togo 

Turkmenistan 

Uganda 

United Arab Emirates 

United Kingdom 

Yemen 

C.4  Italy Embarkation Tax 

IATA 
code 

AHO 

ALL 

AOI 

AOT 

BDS 

BGY 

BLQ 

BRI 

BZO 

CAG 

CIA 

CRV 

CTA 

CUF 

EBA 

FCO 

FLR 

FNU 

FOG 

FRL 

GOA 

GRS 

LCV 

LIN 

Airport name 

Domestic 

EU 
countries 

Other 
countries 

Alghero 

Albenga 

Ancona 

Aosta Valley 

Brindisi 

Milan Bergamo/orio al Serio 
Apt 

Bologna Guglielmo Marconi 

Bari 

Bolzano/Bozen 

Cagliari 

Rome Ciampino Apt 

Crotone 

Catania 

Cuneo 

Elba Island 

Rome Fiumicino Apt 

Florence Peretola Apt 

Fenosu 

Foggia 

Forli 

Genoa 

Grosseto 

Lucca 

Milan Linate Apt 

3.81 

3.43 

4.86 

3.72 

3.69 

5.58 

8.06 

4.8 

5.27 

5.26 

5.97 

3.29 

6.52 

4.09 

3.72 

7.77 

9.99 

2.95 

3.2 

6.18 

1.02 

7.02 

2.15 

4.75 

3.81 

3.43 

4.86 

3.74 

3.69 

5.58 

8.06 

4.8 

5.27 

5.26 

5.97 

3.29 

6.52 

4.09 

3.72 

17.77 

9.99 

2.95 

3.2 

6.18 

11.02 

7.02 

2.15 

14.75 

7.91 

7.62 

8.26 

8.26 

6.68 

10.18 

9.91 

3.81 

8.67 

7.36 

6.15 

7.29 

8.98 

8.37 

8.26 

28.41 

12.08 

6.55 

7.1 

7.65 

17.96 

8.5 

4.77 

17.7 

133 

 
IATA 
code 

LMP 

MXP 

NAP 

OLB 

PEG 

PMF 

PMO 

PNL 

PSA 

PSR 

QSR 

REG 

RMI 

SAY 

SUF 

TAR 

TPS 

TRN 

TRS 

TSF 

VBS 

VCE 

VIC 

VRN 

CIY 

Airport name 

Domestic 

EU 
countries 

Other 
countries 

Lampedusa 

Milan Malpensa Apt 

Naples Capodichino Apt 

Olbia 

Perugia 

Milan Parma Apt 

Palermo 

Pantelleria 

Pisa 

Pescara 

Salerno Costa d'Amalfi 

Reggio Di Calabria 

Rimini 

Siena 

Lamezia Terme 

Taranto 

Trapani 

Turin Caselle Airport 

Trieste 

Venice Treviso/Sant'Angelo 
Apt 

Verona Brescia/Montichiari 
Airport 

Venice Marco Polo Apt 

Vicenza 

Verona Villafranca Airport 

Comiso 

3.72 

4.75 

4.29 

7.74 

4.19 

4.15 

4.84 

1.86 

7.35 

3.79 

3.34 

3.24 

8.38 

3.84 

6.15 

3.83 

3.48 

1.08 

8.47 

8.5 

3.72 

14.75 

8.58 

7.74 

4.19 

4.15 

9.69 

3.72 

7.35 

3.79 

3.34 

7.19 

8.38 

3.84 

6.15 

3.83 

3.48 

11.08 

8.47 

8.5 

8.25 

17.7 

12.77 

11.61 

8.37 

8.28 

12.89 

8.25 

8.42 

8.07 

7.41 

3.24 

8.64 

7.04 

11.43 

8.5 

7.73 

16.62 

14.85 

8.54 

3.96 

3.96 

7.62 

9.81 

5.36 

4.09 

4.94 

9.81 

5.36 

8.18 

6.38 

11.77 

7.13 

10.39 

9.67 

C.5  Sweden Air travel tax 

Destinations outside EU, < 6,000 km from Sweden 
(Stockholm) 

Afghanistan 

Albania 

Algeria 

Andorra 

Armenia 

Azerbaijan 

Bahrain 

Belarus 

Bosnia and 
Herzegovina 

India 

Iran 

Iraq 

Pakistan 

Qatar 

Russian Federation 

Isle of Man 

Saint Pierre and Miquelon 

Israel 

Jersey 

Jordan 

Kazakhstan 

Kuwait 

San Marino 

Saudi Arabia 

Senegal 

Serbia 

South Sudan 

Burkina Faso 

Kyrgyzstan 

Sudan 

Cape Verde 

Lebanon 

Switzerland 

Chad 

Djibouti 

Egypt 

Eritrea 

Ethiopia 

Libya 

Syria 

Liechtenstein 

Tajikistan 

Macedonia 

Mali 

Tunisia 

Turkey 

Mauritania 

Turkmenistan 

Faroe Islands 

Moldova 

Ukraine 

Gambia 

Gaza Strip 

Georgia 

Gibraltar 

Greenland 

Guernsey 

Monaco 

Mongolia 

United Arab Emirates 

United Kingdom 

Montenegro 

Uzbekistan 

Morocco 

Niger 

Nigeria 

West Bank 

Western Sahara 

Yemen 

134 

 
 
Destinations outside EU, < 6,000 km from Sweden 
(Stockholm) 

Guinea Bissau 

Norway 

Iceland 

Oman 

C.6  United Kingdom Air passenger duty 

Destinations < 2,000 miles from UK (London) 

Albania 

Algeria 

Andorra 

Austria 

Belarus 

Belgium 

Bosnia and Herzegovina 

Bulgaria 

Croatia 

Czech Republic 

Denmark 

Estonia 

Faroe Islands 

Finland 

France 

Germany 

Gibraltar 

Greece 

Guernsey 

Hungary 

Iceland 

Ireland 

Isle of Man 

Italy 

Jersey 

Latvia 

Libya 

Liechtenstein 

Lithuania 

Luxembourg 

Macedonia 

Malta 

Moldova 

Monaco 

Montenegro 

Morocco 

Netherlands 

Norway 

Poland 

Portugal 

Romania 

Russian Federation 

San Marino 

Serbia 

Slovakia 

Slovenia 

Spain 

Sweden 

Switzerland 

Tunisia 

Turkey 

Ukraine 

United Kingdom 

Western Sahara 

135 

 
 
 
 
 
 
 
 
D  VAT rates in the European Union 

Country 

Austria 

Rate (in 
bold the 
rate 
applicable 
to 
aviation) 

20% 

13% 

Standard/ 
reduced  

Goods to which rates apply 

Standard 

All other taxable goods and services. 

Reduced 

Belgium 

21% 

12% 

Reduced 

Standard 

All other taxable goods and services. 

10% 

Reduced 

0% 

Zero 

6% 

Reduced 

0% 

Zero 

Domestic flights; entrance to sporting events; firewood; some 
agricultural supplies; wine production; cut flowers and plants 
for decorative use. 

Foodstuffs; take-away food; water supplies; pharmaceutical 
products; domestic transport (ex flights); international and 
intra-community road and rail transport; newspapers and 
periodicals; printed books (ex e-books); pay and cable TV;  
TV licence; social services; domestic refuse collection; 
treatment of waste water; restaurants (ex all beverages); hotel 
accommodation; admission to cultural events and amusement 
parks; cut flowers and plants for food production; some 
agricultural supplies. 

Intra-community and international transport (excluding road 
and rail). 

Some foodstuffs; certain agricultural supplies; some social 
housing; some construction work on new buildings; restaurants 
(all beverages excluded); certain energy products e.g. coal, 
lignite, coke; some pesticides and fertilizers; certain tyres and 
inner tubes for agricultural use. 

Some foodstuffs (including takeaway food); soft drinks; water 
supplies; some pharmaceutical products; some medical 
equipment for disabled persons; domestic transport of 
passengers; some books (excluding e-books); newspapers and 
periodicals (with certain exceptions); entrance to cultural 
events and amusement parks; some social housing; certain 
repair and renovation of private dwellings; some agricultural 
supplies; hotel accomodation; addmission to sporting events; 
use of sports facilities; intra-community and international road, 
rail and inland waterways transport; some motor vehicles; 
some social services; certain undertaker and cremation 
services; minor repairs (including bicycles, shoes and leather 
goods, clothing and household linen); firewood; cut flowers and 
plants for decorative use and food production. 

Daily and weekly newspapers; certain recycled materials and 
by-products; intra-community and international transport 
(excluding road, rail and inland waterways). 

Bulgaria 

20% 

Standard 

All other taxable goods and services. 

Croatia 

9% 

0% 

25% 

13% 

Reduced 

Hotel accommodation and camping. 

Zero 

Intra-community and international transport. 

Standard 

All other taxable goods and services. 

Reduced 

Some foodstuffs; water supplies (excluding bottled water); 
newspapers (other than daily published newspapers with less 
than 50% advertising content); periodicals (magazines other 
than science periodicals with less than 50% advertising 
content); tickets for concerts; hotel accomodation; 
restaurants; certain bars, cafes and nightclubs; some alcoholic 
beverages. 

136 

 
Standard/ 
reduced  

Goods to which rates apply 

Country 

Rate (in 
bold the 
rate 
applicable 
to 
aviation) 

5% 

Reduced 

0% 

Zero 

Some foodstuffs (including bread, milk and infant formula); 
pharmaceutical products (only approved medicines prescribed 
by a doctor); some medical equipment; books (excluding e-
books); daily newspapers (with less than 50% advertising 
content); science periodicals; admission to cinema. 

Intra-community and international transport (excluding road 
and rail). 

Cyprus 

19% 

9% 

Standard 

All other taxable goods and services. 

Reduced 

Some road passenger transport; domestic passenger transport 
by sea; hotel accomodation; restaurants. 

5% 

Reduced 

Basic foodstuffs; water supplies; pharmaceutical products; 
medical equipment for disabled persons; childrens car seats; 
certain road passenger transport; books (excluding e-books); 
newspapers and periodicals; admission to cultural events and 
amusement parks; writers and composers; renovation and 
repair of private dwellings; some agricultural supplies; 
admission to sports events; domestic waste collection; 
hairdressing; some undertaker and cremation services. 

Czech 
Republic 

21% 

15% 

Reduced 

Standard 

All other taxable goods and services. 

Foodstuffs (excluding essential child nutrition); some soft 
drinks; take away food; water supplies; medical equipment for 
disabled persons; children's car seats; some domestic 
passenger transport; some books (excluding e-books); 
admission to cultural events, shows and amusement parks; 
writers and composers; social housing; renovation and repair 
of private dwellings; cleaning of private households; some 
agricultural supplies; hotel accomodation; admission to 
sporting events; use of sporting facilities; social services; 
supplies to undertaker and cremation services; medical and 
dental care; domestic care services; firewood; some 
pharmaceuticals; some domestic waste collection and street 
cleaning. 

Foodstuffs classed as essential child nutrition; newspapers and 
periodicals; pharmaceutical products; some books. 

10% 

Reduced 

0% 

Zero 

Intra-community and international transport. 

Denmark 

25% 

Standard 

All taxable goods and services. 

0% 

Zero 

Newspapers and journals (published more than once a month); 
intra-community and international transport. 

Estonia 

20% 

Standard 

All other taxable goods and services. 

9% 

Reduced 

Pharmaceutical products; medical equipment for disabled 
persons; books (excluding e-books); newspapers and 
periodicals; hotel accommodation. 

0% 

Zero 

Some passenger transport; intra-community and international 
transport. 

Finland 

24% 

14% 

Standard 

All other taxable goods and services. 

Reduced 

Foodstuffs; some agricultural supplies; restaurants; some soft 
drinks; take away food; cut flowers and plants for food 
production. 

10% 

Reduced 

Pharmaceutical products; passenger transport; books 
(excluding e-books); newspapers and periodicals (sold on 
subscription); admission to cultural events and amusement 
parks; TV licence; writers and composers; hotel 

137 

 
Standard/ 
reduced  

Goods to which rates apply 

Country 

Rate (in 
bold the 
rate 
applicable 
to 
aviation) 

0% 

Zero 

accommodation; admission to sports events; use of sports 
facilities; domestic transport. 

Printing services for publications of non-profitmaking 
organisations; intra-community and international transport; 
some taxation of gold ingots, bars and coins. 

France 

20% 

10% 

Reduced 

Standard 

All other taxable goods and services. 

Some foodstuffs; some pharmaceutical products; domestic 
passenger transport; intra-community and international road 
(some exceptions) and inland waterways transport; admission 
to amusement park (with cultural aspect); pay/cable TV; some 
renovation and repairs of private dwellings; some cleaning in 
private households; some agricultural supplies; hotel 
accomodation; restaurants (excluding alcoholic beverages); 
some domestic waste collection; certain domestic care 
services; firewood; take away food; bars, cafes and nightclubs; 
cut flowers and plants for decorative use. 

Some foodstuffs; water supplies, medical equipment for 
disabled persons; books (excluding those with pornographic or 
violent content); e-books; admission to certain cultural events; 
writers and composers; some social housing; admission to 
sports events; some domestic care services; cut flowers and 
plants for food production. 

5.50% 

Reduced 

2.10% 

Reduced 

Some pharmaceutical products; some newspapers and 
periodicals; TV licence. 

0% 

Zero 

Intra-community and international transport (excluding road 
and inland waterways). 

Germany 

19% 

Standard 

All other taxable goods and services. 

7% 

Reduced 

0% 

Zero 

Some foodstuffs; water supplies; medical equipment for 
disabled persons; some domestic passenger transport; intra-
community and international passenger transport for certain 
road, rail and inland waterway transportation; books (excluding 
e-books); newspapers and periodicals; admission to cultural 
events; writers and composers; some agricultural supplies 
(fertilizers); hotel accomodation; certain admission to sports 
events; social services; medical and dental care; firewood; 
some timber for industrial use; take away food; cut flowers and 
plants for decorative use and food production; taxation of some 
gold coins and jewellery. 

Intra-community and international transport (excluding road 
and rail and some inland waterways transport). 

Greece 

24% 

13% 

Reduced 

Standard 

All other taxable goods and services. 

6% 

Reduced 

Basic foodstuffs; water supplies; some pharmaceutical 
products; some medical equipment for disabled persons; some 
agricultural supplies; domestic care services; hotel 
accommodation. 

Some pharmaceutical products; some books (excluding e-
books); some newspapers and periodicals; certain theatre 
admissions. 

0% 

Zero 

Intra-community and international air and sea transport. 

Hungary 

27% 

Standard 

All other taxable goods and services. 

18% 

Reduced 

Certain foodstuffs; admission to certain open air concerts; 
hotel accommodation; restaurant services. 

138 

 
Standard/ 
reduced  

Goods to which rates apply 

Country 

Rate (in 
bold the 
rate 
applicable 
to 
aviation) 

5% 

Reduced 

Certain foodstuffs; pharmaceutical products (intended for 
human use); some medical equipment for disabled persons; 
books (excluding e-books); newspapers and periodicals; some 
social housing; district heating; some supplies for new building. 

Ireland 

0% 

23% 

Zero 

Intra-community and international transport. 

Standard 

All other taxable goods and services. 

13.5% 

Reduced 

9% 

Reduced 

4.8% 

Reduced 

0% 

Zero 

Certain foodstuffs; children's car seats; social housing; 
renovation and repair of private dwellings; cleaning in private 
households; some agricultural supplies; medical and dental 
care; collection of domestic waste; treatment of waste water; 
minor repairs of bicycles, shoes and leather goods and 
household linen; energy for heating and light (including natural 
gas, electricity, district heating, firewood and heating oil); 
moveable property used in the construction and maintenance 
of immovable property; construction work on new buildings; 
supply of immovable property; some social housing; routine 
cleaning of immovable property; services relating to the care of 
the human body; certain tourist services; photography 
services; services supplied by jockeys; works of art and 
antiques; short term hire of certain passenger vehicles; driving 
schools; services supplied by veterinary surgeons; cut flowers 
and plants for decorative use. 

Certain foodstuffs; take away food; some bars and cafes; 
newspapers and periodicals; admission to cultural events and 
amusement parks; hotel accommodation; restaurants 
(excluding all beverages); use of sports facilities; hairdressing. 

Livestock intended for use in the preparation of foodstuffs; 
some agricultural supplies. 

Some books (excluding newspapers and periodicals); some 
foodstuffs; wax candles (undecorated); certain animal feed; 
certain fertilizers; some food supplies for food production; 
some medicines for human consumption; some medicines for 
veterinary use (excluding pets); certain feminine hygiene 
products; some medical equipment; clothing and footwear for 
children; intra-community and international transport; cut 
flowers and plants for food production. 

Italy 

22% 

10% 

Reduced 

Standard 

All other taxable goods and services. 

Some foodstuffs; water supplies; some pharmaceutical 
products; domestic passenger transport; admission to cultural 
events; some social housing; renovation and repair of private 
dwellings; some supplies and construction work for new 
buildings; some agricultural supplies; hotel accomodation; 
restaurants; admission to certain sports events; energy 
products (excluding district heating); firewood; collection of 
domestic waste; some waste water treatment; alcoholic 
beverages in bars and cafes; take away food; cut flowers and 
plants for decorative use and food production. 

Social and health services provided by social cooperatives and 
their consortia. 

Some food products; certain medical equipment for disabled 
persons; certain books; newspapers and some periodicals; 
some e-books; online journals newspapers; TV licence; some 
social housing; some agricultural supplies; certain social 

139 

5% 

4% 

Reduced 

Reduced 

 
Standard/ 
reduced  

Goods to which rates apply 

Country 

Rate (in 
bold the 
rate 
applicable 
to 
aviation) 

0% 

Zero 

services; some motor vehicles; some supplies for new 
buildings; some construction work on new buildings. 

Supplies of land which cannot be used for building; intra-
community and international transport. 

Latvia 

21% 

12% 

Standard 

All other taxable goods and services. 

Reduced 

Food products for infants; pharmaceutical products; medical 
products for disabled persons; domestic passenger transport; 
books (excluding e-books); newspaper and periodicals; hotel 
accommodation; district heating 

0% 

Zero 

Intra-community and international transport 

Lithuania 

21% 

Standard 

All other taxable goods and services. 

9% 

Reduced 

Some domestic passenger transport; books (excluding e-
books); newspapers and periodicals; hotel accommodation; 
district heating. 

5% 

Reduced 

Pharmaceutical products; medical equipment for disabled 
persons. 

Luxembour
g 

0% 

17% 

14% 

Reduced 

Zero 

Intra-community and international transport. 

Standard 

All other taxable goods and services. 

8% 

Reduced 

3% 

Reduced 

Certain wines; solid mineral fuels, mineral oils and wood 
intended for use as fuel with the exception of wood for heating; 
washing and cleaning products; printed advertising matter; 
heat, cooling and steam with the exception of district heating; 
safe custody and administration of securities; administration of 
credit and credit guarantees by a person or organisation other 
than that granting the credit. 

Cleaning in private households; minor repairs of bicycles, shoes 
and leather goods, clothing and household linen; hairdressing; 
district heating; natural gas; electricity; firewood; LPG; cut 
flowers and plants for decorative use. 

Foodstuffs; soft drinks; children's clothing and footwear; water 
supplies; certain pharmaceutical products; certain medical 
equipment for disabled persons; domestic passenger transport; 
books; newspapers and periodicals; admission to cultural 
events and amusement parks; some pay TV/cable TV; 
agricultural supplies (excluding pesticides); hotel 
accomodation; restaurants (excluding alcoholic beverages); 
take away food; bars, cafes and nightclubs, cut flowers and 
plants for food production; supplies for new building; some 
construction work on new buildings; admission to sports 
events; use of sports facilities; undertaker and cremation 
services; collection of domestic waste; some telephone 
services. 

Malta 

0% 

18% 

7% 

5% 

Zero 

Intra-community and international transport. 

Standard 

All other taxable goods and services. 

Reduced 

Hotel accommodation; use of sporting facilities. 

Reduced 

0% 

Zero 

Medical equipment for disabled persons; books (except for e-
books); newspapers and periodicals; cultural events; minor 
repairs of shoes and leather goods, bicycles, clothing, and 
household linens; domestic care services; supply of electricity. 

Some supplies of food for human consumption (excluding some 
processed and pre-cooked foods); prescribed medicines; gold 
ingots and bars; seeds for food production; live animals for 

140 

 
Country 

Rate (in 
bold the 
rate 
applicable 
to 
aviation) 

Netherland
s 

21% 

6% 

Standard/ 
reduced  

Goods to which rates apply 

human consumption; intra-community and international 
transport. 

Standard 

All other taxable goods and services. 

Reduced 

Foodstuffs; some soft drinks; water supplies; certain 
pharmaceutical products; certain medical equipment for 
disabled persons; domestic passenger transport (excluding air 
travel); intra-community and international road, rail and inland 
waterway passenger transport; books; newspapers and 
periodicals; admission to cultural events and amusement 
parks; writers and composers; certain renovation and repair of 
private dwellings; certain cleaning of private households; 
agricultural supplies; hotel accomodation; restaurants 
(excluding alcoholic beverages); take away food; bars, cafes 
and night clubs; admission to sports events; use of sports 
facilities; minor repairs of bicycles; shoes and leather goods; 
clothing and household linen; hairdressing; cut flowers and 
plants for decorative use (some exclusions) and food 
production. 

Taxation of gold coins; intra-community and international 
passenger transport by air and sea. 

0% 

Zero 

Poland 

23% 

8% 

Standard 

All other taxable goods and services. 

Reduced 

Certain foodstuffs; water supplies; pharmaceutical products; 
medical equipment for disabled persons; children's car seats; 
domestic passenger transport; intra-community and 
international passenger transport by inland waterway and road; 
some newspapers and periodicals; admission to cultural events 
and amusement parks; some pay TV/cable TV; writers and 
composers; social housing; certain renovation and repair of 
private dwellings; certain agricultural supplies; hotel 
accomodation; restaurants (excluding alcoholic and certain 
other beverages); admission to sports events; use of sports 
facilities; undertaker and cremation services; collection of 
domestic waste; minor repairs of bicycles, shoes and leather 
goods, clothing and household linen; hairdressing; firewood; 
some take away food; some bars and cafes; cut plants and 
flowers for decorative use and food production (some at 5%); 
some building supplies; some construction work on new 
buildings. 

Portugal 

5% 

0% 

23% 

13% 

Reduced 

Zero 

Some foodstuffs; fruit juices; certain books and periodicals 
(excluding e-books); some agricultural supplies. 

Intra-community and international passenger transport 
(excluding inland waterway and road transport). 

Standard 

All other taxable goods and services. 

Reduced 

Some foodstuffs; admission to certain cultural events; 
restaurant & cafe food; some agricultural supplies; wine; 
mineral water; diesel for agriculture. 

6% 

Reduced 

Some foodstuffs; water supplies; certain pharmaceutical 
products; medical equipment for disabled persons; childrens 
car seats; domestic passenger transport; restaurant services; 
some books (excluding e-books); certain newspapers and 
periodicals; TV licence; social housing; renovation and repair of 
private dwellings; certain agricultural supplies; hotel 
accommodation; some social services; some medical and 
dental care; collection of domestic waste, minor repairs of 

141 

 
Standard/ 
reduced  

Goods to which rates apply 

Country 

Rate (in 
bold the 
rate 
applicable 
to 
aviation) 

0% 

Zero 

Intra-community and international passenger transport. 

bicycles; domestic care services; fruit juices; firewood; cut 
flowers and plants for decorative use and food production. 

Romania 

19% 

Standard 

9% 

Reduced 

5% 

Reduced 

All other taxable goods and services. Standard VAT rate 
decreased from 20% to 19% on 1 Jan 2017 

Foodstuffs; pharmaceutical products; medical equipment for 
disabled persons; books; newspapers and periodicals; hotel 
accommodation; water supplies; restaurants and catering 
services; some beer; soft drinks. 

Social housing; books (excluding e-books); newspapers and 
periodicals; admission to cultural events; admission to sporting 
events. 

0% 

Zero 

Intra-community and international passenger transport. 

Slovakia 

20% 

Standard 

All other taxable goods and services. 

10% 

Reduced 

Some foodstuffs; pharmaceutical products; medical equipment 
for disabled persons; books (excluding e-books). 

0% 

Zero 

Intra-community and international passenger transport. 

Slovenia 

22% 

Standard 

All other taxable goods and services. 

9.5% 

Reduced 

0% 

Zero 

Foodstuffs; water supplies; pharmaceutical products; medical 
equipment for disabled persons; domestic passenger transport; 
books (excluding e-books); newspapers and periodicals; 
cultural events and themeparks; writers and composers; social 
housing; renovation and repairs of private dwellings; cleaning 
of private dwellings; agricultural supplies; restaurants 
(preparation of meals only); hotel accomodation; admission to 
sports events; use of sports facilities; undertaker and 
cremation services; domestic waste collection; minor repairs of 
bicycles, clothes and household linen, shoes and leather goods; 
domestic care services; hairdressing; soft drinks; intra-
community and international road passenger transport; some 
take away food; cut flowers and plants for decorative use and 
food production; certain supplies for new buildings; certain 
construction work for new buildings. 

Intra-community and international transport (excluding road 
transport). 

Spain 

21% 

10% 

Standard 

All other taxable goods and services. 

Reduced 

Some foodstuffs; water supplies; certain pharmaceutical 
products; some medical equipment for disabled persons; 
domestic passenger transport; intra-community and 
international transport by road, rail and inland waterways; 
some social housing; renovation and repair of private 
dwellings; agricultural supplies; hotel accommodation, camping 
and spa services, restaurants and, in general, the provision of 
meals and beverages to be consumed immediately, even if 
they are made after the recipient’s order; some social services; 
domestic waste collection; some soft drinks; bars, cafes, night 
clubs and alcoholic beverages sold therein; cut flowers and 
plants for food production; some supplies for new buildings; 
some construction work on new buildings; entrance to cultural 
buildings and events, including: libraries, archives, and 
documentation centers, museums, art galleries, theaters, 
circuses, bullfights, concerts, and to the other live cultural 
shows; eye glasses, supply of frames, graduated contact lenses 

142 

 
Standard/ 
reduced  

Goods to which rates apply 

Country 

Rate (in 
bold the 
rate 
applicable 
to 
aviation) 

4% 

Reduced 

0% 

Zero 

and the products necessary for their use, care and 
maintenance. 

Some foodstuffs; some pharmaceutical products; some medical 
equipment for the disabled; some books (excluding e-books); 
certain newspapers and periodicals; some social housing; some 
social services. 

Taxation of some gold coins, ingots and bars; intra-community 
and international transport by air and sea. 

Sweden 

25% 

12% 

6% 

Reduced 

Standard 

All other taxable goods and services. 

Reduced 

Some foodstuffs; hotel accommodation; restaurants. 

United 
Kingdom 

20% 

5% 

Reduced 

Standard 

All other taxable goods and services. 

0% 

Zero 

0% 

Zero 

Domestic passenger transport; books (excluding e-books); 
newspapers and periodicals; admission to cultural events; 
writers and composers; admission to sports events; use of 
sports facilities. 

Medicines supplied on prescription or sold to hospitals; printing 
and other services related to the production of magazines for 
non-profit making organisations; intra-community and 
international passenger transport. 

Children’s car seats; social housing; natural gas supplies; 
electricity supplies; energy-saving domestic installations and 
goods; LPG and heating oil; some renovation and repairs of 
immovable property. 

Social housing; printed books (excluding e-books); journals 
and other printed materials; renovations to private housing; 
collections of domestic refuse; household water supplies; basic 
foodstuffs (excluding highly processed or pre-cooked food); 
some take away food; cut flowers and plants for food 
production; prescribed pharmaceutical products; certain 
medical supplies; domestic passenger transport; children's 
clothing and footwear; live animals destined for human 
consumption; seed supplies; construction of residential 
buildings; some supplies for the construction of new buildings; 
sewerage services; motor cycle and bicycle helmets; intra-
community and international passenger transport; some gold 
ingots, bars and coins. 

*: Source: https://www.vatlive.com/vat-rates/european-vat-rates/ 

143 

 
 
 
E  Sales taxes outside the EU 

E.1  Canadian GST/HST 

A nation-wide GST of 5% is levied. Some countries levy an additional HST varying 
between 0% and 10%. 

Province 

Alberta 

British Columbia 

Manitoba 

New Brunswick 

Rates On or after October 1, 2016 

5% 

5% 

5% 

15% 

Newfoundland and Labrador  15% 

Northwest Territories 

Nova Scotia 

Nunavut 

Ontario 

Quebec 

Prince Edward Island 

Saskatchewan 

Yukon 

5% 

15% 

5% 

13% 

5% 

15% 

5% 

5% 

144 

 
 
 
F  Exchange rates used 

Country 

Bulgaria 

Croatia 

Czech Republic 

Denmark 

Hungary 

Poland 

Romania 

Sweden 

United Kingdom 

Norway 

United States 

Brazil 

Hong Kong 

Australia 

Armenia 

Bahrain 

China 

Kuwait 

Mexico 

Oman 

Qatar 

United Arab Emirates 

Singapore 

Thailand 

Japan 

Philippines 

Vietnam 

Canada 

Currency  Exchange rate 

BGN 

HRK 

CZK 

DKK 

HUF 

PLN 

RON 

SEK 

GBP 

NOK 

USD 

BRL 

HKD 

AUD 

AMD 

BHD 

CHN 

KWD 

MXN 

OMR 

QAR 

AED 

SGD 

THB 

JPY 

PHP 

VND 

CAD 

0.5115 

0.1370 

0.0384 

0.1343 

0.0032 

0.2160 

0.2174 

0.1003 

1.1096 

0.1070 

0.8356 

0.2680 

0.1071 

0.6713 

0.0018 

2.2443 

0.1271 

2.0900 

0.0471 

2.1760 

0.2646 

0.2274 

0.6213 

0.0253 

0.0075 

0.0166 

0.0000370 

0.679 

Note: Effective exchange rates as of September 2017. 

145 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
G  Noise and Emission charges 

Noise and emission charges are usually charged by airports and are generally airport-
specific. The table below summarises the noise and emission charges for the largest 
airports in the countries considered. In some cases – most notably Australia – surcharges 
are only levied at certain (smaller) airports.  

Noise charges are levied at an aircraft basis, either per movement, MTOW (maximum 
takeoff weight) or noise value unit (e.g. Vienna). In many cases, the charge differs 
between aircraft categories, where airports generally define their own categorisation. 
Most airports distinguish between night and daytime operations for noise charges, where 
night charges are often substantially higher. In Zurich for example, charges for category 
4 aircraft (e.g. Boeing 737-700 or Airbus A319) are 10 Swiss francs (€ 8.72) per landing 
during daytime hours, but increase to CHF 1,500 (€ 1,308) for landings between 
midnight and 6.00 AM. Moreover, airports tend to distinguish noise charges per aircraft 
category, based on their noise emission levels. As such, these charges are imposed to 
incentivise the use of quieter aircraft and at times that is less inconvenient for the 
neighbouring area (as well as respect the night curfews).  

Table 49 – Noise and emission charges 

Country 

Airport 

Noise 

Unit rate 

Description 

Austria 

VIE 

EUR 2.00 

Charges per noise 
value unit84 

Emission 

Unit rate per 
kg NOx 
- 

Belgium 

BRU 

Bulgaria 

SOF 

R8: 0.70 * basic landing fee 
R7: 0.75 * basic landing fee 
R6: 0.80 * basic landing fee 
R5: 0.85 * basic landing fee 
R4: 0.95 * basic landing fee 
R3: 1.05 * basic landing fee 
R2: 1.50 * basic landing fee 
R1: 2.00 * basic landing fee 
Category 1 EUR 0.19 
Category 2 EUR 0.23 
Category 3 EUR 0.3 
Category 4 EUR 0.46 
Category 5 EUR 0.68 

Czech 
Republic 

PRG 

Category 5 CZK 122.9/EUR 4.71 
Category 4 CZK 61.9/EUR 2.37 
Category 3 CZK 29.9/EUR 1.15 
Category 2 CZK 12.9/EUR 0.49 
Category 1 CZK 5.9/EUR 0.23 

Higher charges during 
night hours (up to 
factor 3) 

Daytime charges per 
ton MTOW, higher 
charges during night 
hours (x2) 

- 

Charges per ton MTOW 

- 

Denmark 

CPH 

- 

16.72 DKK/ 
EUR 2.25 

84   See also: https://www.viennaairport.com/jart/prj3/va/uploads/data-

uploads/Charges%20Regulations%202018.pdf 

146 

 
 
 
 
 
 
 
                                                 
Country 

Airport 

Noise 

Emission 

France 

CDG 

Germany 

FRA 

Daytime charges per 
ton MTOW, higher 
charges during night 
hours (x150%) 

Daytime charges per 
movement, higher 
charges during night 
hours (x3) 

3.08 EUR 

EUR 23.5 x 1.3 (Group 1)  
EUR 23.5 x 1.2 (Group 2 (EPNdB 
below 5 db))  
EUR 2.5 x 1.15 (Group 3 (EPNdB 
between 5 and 8 dB), Chapters 3-
5)  
EUR 23.5 (Group 4 (EPNdB 
between 8 and 13 dB))  
EUR 23.5 x 0.85 (Group 5a 
(EPNdB above 13 dB))  
EUR 23.5 x 0.7 (Group 5b 
(Chapters 6/8/10/11) ) 
Category 1 EUR 83.79 
Category 2 EUR 102.39 
Category 3 EUR 124.14 
Category 4 EUR 134.57 
Category 5 EUR 201.03 
Category 6 EUR 388.6 
Category 7 EUR 423.91 
Category 8 EUR 584.92 
Category 9 EUR 636.69 
Category 10 EUR 746.58 
Category 11 EUR 804.33 
Category 12 EUR 1,351.5 
Category 13 EUR 1,685.45 
Category 14 EUR 2,813.0 
Category 15 EUR 22,742.0 

Hungary 

BUD 

EUR 7.58 

Netherlands 

AMS 

Poland 

WAW 

Spain 

MAD 

Sweden 

United 
Kingdom 

ARN 

LHR 

Switzerland 

ZRH 

Noise Category MCC3 EUR Basic 
landing compensation increased 
by 60% 
Noise Category A EUR Basic 
landing compensation increased 
by 40% 
Noise Category B EUR Basic 
landing compensation  
Noise Category C EUR Basic 
landing compensation reduced by 
20% 
Category 1 0 PLN (only night 
charges) 
Category 2 0 PLN (only night 
charges) 
Category 3 0 PLN (only night 
charges) 
Category 4 PLN 6.5 / EUR 1.52 
Category 5 PLN 9.0 / EUR 2.11 
Noise Category 1 70% surcharge 
of the landing charge 
Noise Category 2, 20% surcharge 
of the landing charge 
Noise Category 3 
Noise Category 4 
- 

Chapter 3: 700% of ch14 base 
landing charges 
Chapter 4 high: 200% of ch14 
base landing changes 
Chapter 4 base: 180% of ch14 
base landing charges 
Chapter 14 high: 140% of ch 14 
base landing charges 
Chapter 14 base: 100% 
Chapter 14 low: 60% of ch 14 
base landing charges 
Noise Class 1 CHF 2,000.0 /EUR 
1743.68  
Noise Class 2 CHF 400.0 / EUR 
348.74  
Noise Class 3 CHF 40.0 / EUR 

Unit rate per 
movement 
Daytime charges, 
higher charges during 
night hours (x150% 
(take-off) or x127% 
(landing)) 

Night time charges are 
around 10 times higher 
for category 4 and 5. 
Charges per ton MTOW 

Daytime charges, night 
charges are higher 
(x2) 

Night 2.5 times higher 

50 SEK / 5.24 
EUR 
15.96 GBP / 
17.84 EUR 

Daytime charges, night 
charges are higher (up 
to 250x higher for 
departures between 
0:00 and 6:00) 

147 

 
 
 
 
 
 
 
  
Country 

Airport 

Noise 

Emission 

Australia 

BNE (none 
at other 
airports) 

Japan 

34.87 
Noise Class 4 CHF 10.0 / EUR 
8.72 
Noise Class 5 CHR 0  

For the use of the runway and 
taxiway system and aprons by 
Marginally Compliant Aircraft, a 
noise surcharge will apply in the 
amount of 50 %. 
Noise Rating Index A JPY 1,550.0 
/EUR 11.75 
Noise Rating Index B JPY 1,650.0 
/EUR 12.51 
Noise Rating Index C JPY 1,750.0 
/EUR 13.27 
Noise Rating Index D JPY 1,850.0 
/EUR 14.02 
Noise Rating Index E JPY 1,950.0 
/EUR 14.78 
Noise Rating Index F JPY 2,000.0 
/EUR 15.16 

Minimum rate JPY 
50,000, unit rate per 
MTOW 

Note:  Countries that are not included in the table do not impose any noise or emission charges. 
Source:  IATA Airport Charges Intelligence Centre; individual airport charges manuals 

148 

 
 
 
 
 
 
 
 
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149 

 
 
 
 
 
 
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doi: 10.2832/913591