In some respects Russia’s development has followed a pattern familiar to Westerners, but that is not true for its business aviation industry. While Russian billionaires show off their huge yachts in the most expensive and trendy places in the world, buy A380s for personal use, haunt French ski resorts and buy islands off Dubai, some of the nation’s laws prevent wealthy individuals from reaping the benefits of business aircraft.
Business aircraft owners who want to move up have the option to engage in a “like-kind exchange” that could save thousands of dollars in capital gains taxes, according to Tonya Fritts, vice president and relationship manager for North Carolina-based Wachovia Exchange Services (Booth No. 3769).
Value Added Tax (VAT) and import duties for aircraft currently stand at zero percent in Denmark. This allows international operators to avoid tax by basing their aircraft in Denmark. However, zero-rated VAT is in contradiction with European law and pressure is mounting on Danish legislators to adjust their taxes upward.
Business aviation operations in Arizona stand to benefit from new legislation that returns certain aviation tax revenues to the state’s airport improvement programs. Arizona governor Jane Dee Hull signed SB1251 into law on May 2, authorizing the deposit of 100 percent of flight property tax revenues into the state aviation fund starting in fiscal year 2004.
Value Added Tax (VAT) and import duties for aircraft currently stand at zero percent in Denmark. This allows international operators to escape tax by basing their aircraft in Denmark. However, zero-rated VAT is in contradiction with European law and pressure is mounting on Danish legislators to adjust their taxes upward.
Valued-added taxes (VAT) may now amount to 25 percent of a jet fuel purchase in some parts of Europe. But that’s the bad news. The good news is that in most cases this tax may be refunded, as may VAT levied on many other business-
related goods and service expenses incurred by company employees traveling abroad.
Prodded by perceived FAA failings and the threat of summer air travel delays, the Senate Transportation and Finance Committees reached agreement late last week on how to fund the FAA for the next four years. If the bill is approved by the full Senate today, it is expected to keep avgas taxes at the current rate of 19.3 cents per gallon but increase jet fuel taxes to 36 cents per gallon, up from 21.8 cents.
The Russian government is considering softening the import tax requirements for business jets and certain types of on-board and airport equipment not produced domestically, according to Valery Voskoboinikov, deputy head of the Russian state agency Rosaviacosmos.
Conklin & de Decker last month released the 2008 State Tax Guide for General Aviation. The guide contains the latest taxes and fees for all 50 states, as well as sales and use tax applicable to aircraft sales, ownership, lease, parts and labor.
Echoing a refrain that has been sung around Washington for years, Air Transport Association president and CEO James May reiterated recently that the airlines have been subsidizing general aviation, business aviation and government users of the civil aviation system for years, and he called for a sweeping reform of tax policies.