Aviation Fuel Tax in Austria
The Aviation Team of Weisenheimer Legal has recently secured a business jet operator’s right to tax-free use of aviation fuel in Austria.
According to Article 14 Energy Products Directive (2003/96/EC), energy products supplied for use as fuel for the purpose of commercial air navigation (“other than in private pleasure-flying”) are exempt from EU Energy Tax. In order to benefit from this tax exemption, an operator must obtain a refueling certificate. To obtain such a refueling certificate, an “exclusively commercial use of the aircraft by the operator” must be shown and supported by appropriate evidence.
For several years, it was unclear in Austria what constitutes an “exclusively commercial use of the aircraft” and what evidence the authorities may reasonably demand from the operator to prove it.
With the majority of business aviation flights booked with operators not by passengers but rather via charter brokers, the Austrian authorities insisting on the disclosure of “end-customer invoices” (i.e. invoices issued by brokers to passengers), many operators could not discharge the burden of proof and were thus denied refueling certificates necessary for tax-free use of aviation fuel in Austria. Furthermore, Austrian Customs (Zollamt Österreich) insisted that the sale of flights via charter brokers meant that it were the brokers and not the operator who exercised the effective control and enjoyed the use of the aircraft for the duration of the flight booked.
Following the intervention by Weisenheimer Legal and the support of Austrian Business Aviation Association (ABAA), the Federal Finance Court decided that the mere fact that flights are sold via charter brokers does not effect a transfer of control and use of the aircraft to third parties (brokers). Therefore, it was decided that invoices issued to brokers by an operator with a valid Air Operator Certificate (AOC) were sufficient evidence of “exclusively commercial use of the aircraft by the operator”.
The decision is available here (in German).
This decision is the next positive development in a chain of court decisions issued after the Austrian Supreme Administrative Court decided in September 2022 that flights operated by business jet operators for the aircraft owners satisfied the requirement of commercial operation and thus qualified for tax-free use of Aviation fuel as long as they were operated “for a fee”, which could also take the form of a (monthly) management fee (case number Ra 2019/16/0104).