EU Backs Down on Airline Tax

February 27, 2013 International Tax CooperationTaxation in EU

Tax on international flightsBRUSSELS – International pressure has forced the EU to step back and temporarily drop the environmental taxes levied on intercontinental flights in order to continue negotiations with foreign governments.

In a working meeting held on February 26th, the Committee on the Environment, Public Health and Food Safety of the European Parliament agreed to enact a one year suspension to a controversial tax on emissions and pollutants released by airplanes traveling between Europe and other destinations around the world.

Currently all airlines using an airport in the countries of the EU would fall under the scope of the European CO2 Emissions Trading Scheme, which required airlines to purchase credits for a portion of the greenhouse gases emitted during flights to and from Europe.

The suspension is intended to allow time for discussions to be held between governments around the world and the International Civil Aviation Organization regarding potential new measures which could be implemented globally in order to reduce the amount of emissions produced by airlines.

The Committee indicated that the suspension could be extended beyond the indicated time-frame, if sufficient progress towards the implementation of an alternative tax measure.

The original rules which included airlines in the EU Emissions Trading Scheme were first implemented earlier last year, but were met with near instant controversy and oppositions, especially from the governments of the US, China, Australia and New Zealand.

Photo by Mr. T in DC