ITALIAN AEROTAXI TAX

ALL YOU NEED TO KNOW ABOUT ITALIAN AERO TAXI PASSENGERS TAXATION

1. What is the Italian aerotaxi passengers Tax?

Italy established a state tax on flights by air cab passengers; the tax is also applied to cab flights made by helicopter.

The tax is due by the passenger and paid by the carrier.

The aerotaxi tax, due for each passenger and upon the carrying out of each route, is fixed at an amount equal to:

• € 10,00 in the event of a journey not exceeding 100 kilometers;

• € 100,00 in the event of a journey exceeding 100 kilometers and not exceeding 1,500 kilometers;

• € 200,00 in the event of a journey exceeding 1,500 kilometers.

The length of the route is equal (regardless of any technical stop-over) to the orthodromic distance between the arrival point and the starting point increased by 95 Km.

2. Who is liable to pay the aerotaxi tax?

The aerotaxi tax is payable by the passenger who must correspond it to the carrier in relation to each flight with departure and / or arrival on the italian territory.

The aero taxi tax, therefore, is due by the passenger but it must be paid to the State of Italy by the carrier who must take care of making the payment in relation to each route.

3. When the Italian aerotaxi passengers tax has to be payed?

For journeys made by aircraft registered in the national aeronautical register kept by ENAC, or in the registers of EU countries or belonging to the EEA, the carrier should pay the aerotaxi tax by the end of the month following that in which the service is carried out.

For journeys made by aircraft not registered in the national aeronautical register kept by ENAC and neither in the registers of EU countries or belonging to the EEA, the carrier should pay the aero taxi tax, for each route, before departure or within the day following arrival in the national territory.

4. How the Italian aero taxi tax has to be payed?

The aerotaxi tax is payed by the carrier using the form “F24 payments with identifying elements” tax code 3379.

Is allowed also, for non Italian operators, the extinction of the aero taxi tax by performing a bank transfer in Euro to the italian “Ragioneria Generale dello Stato” on the following IBAN IT48 A010 0003 2453 4800 8122 400, BIC code BITAITRRENT, stating in the causal for paying:

• the identity of the carrier;

• number of passangers;

• the type of the route (“A” if the distance is less than 1500 km and “B” for longer distance);

• code 3379;

• and the date of execution of the aerotaxi service.

5. What does it happen if the operator doesn’t pay the aero taxi tax?

If the operator does not pay the Italian aerotaxi passengers tax when it becomes due the operator is served with a “processo verbale di constatazione” (notice of assessment).

The “processo verbale di constatazione” is issued by the Guardia di Finanza (Tax Police) and is served for one or more years and in relation with flights on one single airport.

Moreover the “processo verbale di constatazione” should contain a list of the flights which are relevant to tax following this example:

Flight nr.	​Date	Arrival / Departure	Apr arrival / departure	Nr Pass.	Distance	Tax
1	7/8/2018	arrival	Moscow Vnkovo (VKO)	4	> 1.500 Km	€ 800
2	1/2/2020	departure	Roma Ciampino (CIA)	2	< 1.500 Km	€ 200
			TOTAL	6	TOTAL	€ 1.000

The “processo verbale di constatazione” should contain also the amount of the penalty equal to 30% of the tax due.

With the “processo verbale di constatazione” the Tax Police inform the Operator that has the possibility before 60 days from the notify of the “processo verbale di constatazione”:

• under art. 12, paragraph 7, of Law n. 212 of 27 July 2000, to send to the “Agenzia delle Entrate” (Inland Revenues Authority) comments or observations;

• as well, under art. 6, paragraph 1, of Legislative Decree n. 218/1997, the option to formulate a proposal of assessment (“istanza di accertamento con adesione”); with this proposal of assessment is possible to open a dialogue with the “Agenzia delle Entrate” to reduce the aero taxi tax due and obtain the application of penalty reduced (from the 30%) at the 10%.

Comments/observation and proposal of assessments could be useful to try to reduce the italian aerotaxi tax due pointing out factual circumstances like errors, in which is incurred the tax Police, relating to the distance of the flights or the number of passengers.

The Operator, if it deems that the assessments is correct, can also pay the amounts requested by the Tax Police so avoiding other issusses.

The Agenzia delle Entrate - if the Operator doesn’t send the comments/observations neither the proposal of assessment (“Istanza di accertamento con adesione”) or if the Agenzia delle Entrate deems that the comments/observations are not relevant or that there’s not space for a dialogue to reduce the aero taxi tax due - in case of non-payment issues to the operator an “atto di recupero” (order of payment).

The “atto di recupero” (order of payment) is issued for an overall amount including:

• the aerotaxi tax due on the basis of distances covered with each flight and the number of passengers carried by the operator;

• the 30% penalty on the tax due;

• interest for late payment.

Within, 60 days from the date of notification of the “atto di recupero” (order of payment) the operator should choose to pay the total amount due (tax, penalties reduced at 10% and interests) or to sue, within the same time limit, the Agenzia delle Entrate to have the aero taxi tax claim dismissed.

6. Is it possible to sue the Agenzia delle Entrate and to win the case?

Yes, it is. Is possible to sue the Agenzia delle Entrate pointing out error in factual circumstances (ie distance of the flights, the number of passengers, etc…) and also errors in law.

Article 16, co. 10 bis, of DL December 6th 2011, n. 201, provides: “A state tax on flights by air cab passengers is hereby established. The tax is also applied to cab flights made by helicopter. The tax is due by the passenger and paid by the carrier. The tax, due for each passenger and upon the carrying out of each route, is fixed at an amount equal to: a) 10 euro in the event of a journey not exceeding 100 kilometers; b) 100 euro in the event of a journey exceeding 100 kilometers and not exceeding 1,500 kilometers; c) 200 euro in the event of a journey exceeding 1,500 kilometers".

The aforementioned co. 10 bis was introduced by article 3 sexies of Italian Decree-Law 2/3/2012, no. 16, whose co. 15 delegated the Director of the Agenzia delle Entrate (Tax Office) to adopt a specific provision for the determination of the methods and terms of application of the aerotaxi tax.

The Director of the Agenzia delle Entrate (Tax Office) has issued the Provision 28/6/2012 (hereinafter simply "Provision") with which he has provided: "1.2. Air cab flights, subject to the Tax, are the flights carried out for the transport of passengers under “contratti di noleggio” (hereinafter, “charter contracts”), for the entire capacity of the aircraft".

It follows that the italian aero taxi passengers tax is due if three concurrent prerequisites are met, namely that:

1. the flights are carried out for the “trasporto di passeggeri” ("transport of passengers");

2. under “contratti di noleggio” (“charter contracts”);

3. the object of which is “l’intera capacità dell’aeromobile” (“the entire capacity of the aircraft”).

If in the specific case lacks one of this prerequisites then the “atto di recupero” (order of payment) is unlawful beeing in conflict with article 16, co. 10 bis, of DL December 6th 2011, n. 201 and with the Provision.

Very often the Tax Police and the Agenzia delle Entrate serves order of payment:

• for contracts which can’t be qualified charter contracts (second prerequisite)

• or for contracts which can be qualified like charter contracts but not for the entire capacity of the aircraft (second prerequisite)

and when this occurs, well to sue the Agenzia delle Entrate is a good choice.

6.1 What’s about the second taxation prerequisite (“contratto di noleggio”, charter contract)?

The aerotaxi tax must be applied only on flights regulated by charter contracts.

The Italian Civil Code does not regulate the charter contract; on the contrary, the Italian Code of Navigation, i.e., the special legislation on maritime and air navigation, provides the following definition for it: "Chartering is the contract whereby the ship operator [NDR or the aircraft operator], in consideration of the agreed price, undertakes to carry out with a specific ship [NDR or with a specific aircraft] one or more predetermined journeys, or, within the agreed period of time, the journeys ordered by the charterer under the conditions established by the contract or by custom". (articles 384 and 940, co. 1, CN); it is also expressly provided that the regulations regarding charter contracts applies “also in case of chartering of part of the capacity of the aircraft" (article 940, co. 2, CN).

The charter contract differs from the “contratto di locazione di aeromobile” (“aircraft lease contract”), regulated by articles 939 and 376 CN, in that in the case of chartering the vessel remains at the disposal of the operator (who is responsible for operating it and maintains the crew at its dependencies) whereas in the case of the lease contract it is the lessee who assumes all the responsibility and the risk for operating the vessel; in this regard, the jurisprudence of the European Union has clarified that "Unlike the charter operator, the lessor, while pursuing an economic advantage, would remain extraneous to the use of the boat during navigation since he transfers the availability of the asset to the lessee, who assumes all the burden and risk" (EU Court of Justice, Sect. VIII, 16/9/2021 no. 341/20).

Article 1678 of the Italian Civil Code regulates the “contratto di trasporto” (“transport contract”), according to which "With the transport contract the carrier undertakes, in return for consideration, to transfer persons or goods from one place to another"; the Italian Code of Navigation, on the other hand, although dealing with the "transport by air of persons and baggage" does not provide a definition of the related contract; in fact, article 941 CN limits itself to providing, without anything else being added, that the air transport of persons and baggage is regulated by the European Union and international regulations in force in Italy; these, however, also do not contain a definition of the contract in question; among them, insofar as it may be useful here we hereby mention the following:

• article 3 of the Warsaw Convention of 12/10/1929: "1. In the transport of passengers, a ticket is issued, containing: a. the indication of the point of departure and the point of destination; b. if the point of departure and the point of destination are situated in the territory of a same other contracting Party (of the Convention) and one or more stopovers in the territory of another State are provided for, the indication of such stopovers; c. a notice indicating that the transport of a passenger on a journey with final destination or stopover in a country other than that of departure, may be governed by the Warsaw Convention, which, in general, limits the liability of the carrier in case of death or bodily injury and loss of or damage to baggage; 2. The ticket is evidence, until proven otherwise, of the stipulation and of the conditions of the transport contract…” (the Montreal Convention expresses itself in the same sense);

• article 2 of EC Regulation no. 261 of 11/2/2004 (regarding compensation and assistance to air flight passengers) provides that "ticket" means “a currently valid document giving entitlement to transport or an equivalent document in paperless form, including electronic form, issued or authorized by the air carrier or by its authorized agent".

With regard to the distinction between the charter contract and the trasport contract, it has been specified that "As a preliminary point, it is necessary, on the one hand, to point out that the charter contract of a boat is the one by which the charter operator, against the payment of a price, the charter fee, puts the boat at the disposal of a charterer who will use it for its own needs. The charter contract is thus distinguished from the transport contract, the object of which is not the making available of the boat [or of an aircraft] in whole or in part, but a provision of services of transfer of goods or persons." (EU Court of Justice, Sect. VIII, 16/9/2021 no. 341/20; in the same sense see also EU Court of Justice; Sect. IV, 18/10/2007, no. 97/06).

In theory, it appears simple to draw the dividing line between the charter contract and the trasport contract of persons (or goods), as with the former one party puts at the disposal of the other party exclusively an aircraft (and the personnel necessary for its operation), while with the latter, it provides a service of transport of persons from one place to another (C. PASQUALE - M. SCHEPIS, "Trasporto - Diritto Civile", Guide Eutekne).

In reality, however, it may be difficult in practice to qualify a given contractual relationship as a charter contract or as a transport contract: "The charter contract differs typologically from the transport contract, both because the charterer may use the voyages for purposes other than those of transport (fishing, scientific surveys, pleasure, etc.), and because, even if transports are carried out with the ship, it is the charterer who is obliged to third parties (loaders or passengers) assuming the quality of carrier. In such case, in practice, the charter operator undertakes towards the charterer to carry out the voyage, and the charterer undertakes towards third parties to carry out the transport, using the charter operator’s ship. Therefore, just as the lease contract determines a split between the figure of the owner-lessor and that of the operator-lessee, likewise the charter contract determines a split between the figure of the charterer and that of the charter operator-carrier. According to this approach, followed by the majority of the doctrine, the difference between the two contractual figures of chartering and of transport is to be found in the different function of the journey, which in chartering is the purpose of the contract, while in transport it is instrumental with respect to the transfer of goods or persons. However, it appears evident that in practice it is difficult to distinguish between the two contractual figures, especially between the travel charter and the transport of cargo, considering that the travel charter is carried out precisely to transpor goods from one place to another" (M.PEZONE, "I Contratti di utilizzazione della nave").

It has been further stated that "In particular, during the period of the Italian Code of Navigation being in force, the question regarding the distinction between chartering and transport and the relationship between the two contractual figures has been much debated. Alongside those who have considered chartering as a completely autonomous and distinct contract, being even the expression of a wider contractual type of civil law, there have been those who, on the contrary, have seen precisely in the charter contract a sub-type of the transport contract". (V. CUFFARO, "I contratti di utilizzazione dei beni", UTET Giuridica, ed. 2008).

Moreover, in operating practice, contracts relating to the use of aircrafts are often stipulated on the basis of Anglo-Saxon models, which makes it difficult to trace them back to the contractual frameworks typified by Italian law.

Trying to draw the lines of the examined legislation, jurisprudence and doctrine, it seems legitimate to say that:

• with the charter contract i) the operator, i.e. he who assumes the operation of the aircraft , ii) against payment of a consideration iii) undertakes to carry out with a specific aircraft (placing it in whole or in part at the disposal of the charterer) iv) one or more predetermined journeys (travel charter) or, within an agreed period of time, the journeys ordered by the charterer (time charter) v) while maintaning the operation of the aircraft and the crew at its dependencies (so that the risks and dangers deriving from the use of the vessel remain under his responsibility and are not transferred to the charterer);

• with the charter contract, tickets are not usually issued, which, on the contrary, are the typical evidence of the transport contract;

In conclusion, it can be argued that the Provision when mentioning "charter contracts" intends to refer precisely to the aircraft charter contract governed by articles 940 and 384 CN as defined above and not to other types of contracts such as the aircraft lease or the passengers and baggage transport service; and this even if, as seen, in practice it is not easy to understand whether a given contractual relationship should be qualified as a charter contract or as a passenger and baggage transport contract.

6.2 What’s about the third taxation prerequisite (“the entire capacity of the aircraft”)?

The aero taxi tax is applied exclusively when passengers are transported on the basis of a charter contract having as its object, as specified in point 1.2 of the Provision, "the entire capacity of the aircraft" and not also just part of it.

Authoritative doctrine, dealing with a matter concerning VAT, and therefore dealing with a tax issue even if not related to the aerotaxi tax, taking a cue from some clarifications by the Agenzia delle Entrate (Tax Office) (Res. Min. Fin., 17/11/1994, no. 15-448 and Res. Agenzia, 5/3/2002, n. 73), has held that if a company provides services that may be construed as "cab flights" for the transport of passengers and enters into a contract with a single party for the exclusive use of the aircraft, the service in question should be construed as a charter contract and not a transport of persons contract, in that its object is essentially the aircraft's entire capacity (G. GRECO, "Imponibilità dei servizi relativi alle operazioni doganali”, in Dogane e Territorio no. 6/2021; L'ESPERTO RISPONDE, "Con quale regime IVA l'aero-taxi vola", Sole24Ore, May 6, 2002).

6.3 So, in conclusion, when it’s a good idea to sue the Agenzia delle Entrate?

In light of what has been highlighted above, it can be said, with reasonable probability, that the contract whereby the aircraft operator, which provides air cab services, grants a single contracting party the exclusive use of the entire aircraft (i.e., of all of its seats), can certainly be qualified as a charter contract relating to the entire capacity of the aircraft; and this, with consequent tax liability. No way in this case to sue the Agenzia delle Entrate.

On the contrary, whenever the aircraft operator, which provides air cab services, grants a third party the use of only one or more seats, and therefore not the entirety of the seats (i.e., the entire aircraft), it is reasonable to exclude the applicability of the taxation (because in this case occurs a transport of persons contract and not a charter contract); in this situation it’s possible to sue the Agenzia delle Entrate having good chances to win the case.

We have win cases proving that in the specific situation didn’t occur a charter contract but passengers and baggage transport service and we proved this producing in the court proceeding the tickets and the agency contract with a third party to sell them.

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