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Aviation Tax, Free Trade and State Aid in the European Union: Ireland’s Riddled Air Travel Tax: Case T473/12 Aer Lingus Ltd v. Commission , and Case T-500/12 Ryanair Ltd v. Commission

Aviation Tax, Free Trade and State Aid in the European Union: Ireland’s Riddled Air Travel Tax:... ec Forum TAX REVIEW 2015­4 Jon Truby* 2 BACKGROUND Ireland's ATT included a lower and a higher rate of tax based on distance from Dublin. For passengers flying to destinations 0-300 km from Dublin EUR 2 was levied and for passengers flying over this distance EUR 10 was levied.7 Ryanair8 complained to the EC that its Irish competitor airlines, Aer Arann9 and Aer Lingus,10 were benefiting from this two-tier tax system, and the EC conducted an investigation in line with its existing guidelines.11 Ryanair complained the ATT two-tier banding restricted travel contrary to EU rules on freedom to provide services, which the EC investigated and concluded by sending Ireland a letter of formal notice.12 Ireland responded by amending its legislation so that effective from 1 March 2011 there was simply a single EUR 3 tax rate instead of two different rates.13 It also claimed that low cost airlines, such as Ryanair, suffered from the flat-rate tax since it made up a much higher proportion of the ticket charge than regular cost airlines, so the ATT was discriminatory. Ryanair further argued that those competitor airlines benefited further since many of their passengers were transit and transfer passengers to whom http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png EC Tax Review Kluwer Law International

Aviation Tax, Free Trade and State Aid in the European Union: Ireland’s Riddled Air Travel Tax: Case T473/12 Aer Lingus Ltd v. Commission , and Case T-500/12 Ryanair Ltd v. Commission

EC Tax Review , Volume 24 (4) – Aug 1, 2015

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Kluwer Law International
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Abstract

ec Forum TAX REVIEW 2015­4 Jon Truby* 2 BACKGROUND Ireland's ATT included a lower and a higher rate of tax based on distance from Dublin. For passengers flying to destinations 0-300 km from Dublin EUR 2 was levied and for passengers flying over this distance EUR 10 was levied.7 Ryanair8 complained to the EC that its Irish competitor airlines, Aer Arann9 and Aer Lingus,10 were benefiting from this two-tier tax system, and the EC conducted an investigation in line with its existing guidelines.11 Ryanair complained the ATT two-tier banding restricted travel contrary to EU rules on freedom to provide services, which the EC investigated and concluded by sending Ireland a letter of formal notice.12 Ireland responded by amending its legislation so that effective from 1 March 2011 there was simply a single EUR 3 tax rate instead of two different rates.13 It also claimed that low cost airlines, such as Ryanair, suffered from the flat-rate tax since it made up a much higher proportion of the ticket charge than regular cost airlines, so the ATT was discriminatory. Ryanair further argued that those competitor airlines benefited further since many of their passengers were transit and transfer passengers to whom

Journal

EC Tax ReviewKluwer Law International

Published: Aug 1, 2015

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