Representation in Ireland

State aid: Commission confirms Irish air travel tax exemption for transit and transfer passengers did not constitute state aid


Airport passenger
The European Commission has found that the exemption for transfer and transit passengers from the Irish air travel tax was in line with EU state aid rules.
The exemption did not selectively favour certain airlines and therefore involved no state aid within the meaning of EU rules.

This concerns an excise duty, which was in place from March 2009 to April 2014, and applied to airlines operating in Ireland. The tax had to be paid for each passenger flying from an airport located in Ireland. However, departures of passengers in transfer or transit were exempted from the tax.

On the basis of its in-depth investigation, the Commission has now concluded that the exemption was in line with the underlying logic of the Irish air travel tax, which was to tax journeys by air originating from Ireland. If a passenger transfers or transits in Ireland they are on a single journey from their airport of origin to their airport of destination, and not on two separate journeys arriving in and originating from Ireland.

The exemption also avoids such a journey being subject to taxation twice, both at the airport of origin and at the airport where the transfer or transit took place, which can lead to double taxation. Moreover, a tax system aimed at taxing journeys by air, instead of individual flights constituting such journeys, did not in itself induce undue discrimination among airlines.

This decision follows a judgment by the General Court (case T-512/11) annulling the Commission's 2011 decision that the exemption did not result in state aid, on the basis that the Court considered that the Commission should have initiated the formal investigation procedure in order to gather relevant information. The non-confidential version of the decision will be made available under case number SA.29064 in the State Aid Register on the Commission's competition website once any confidentiality issues have been resolved.