Business Irish

Sunday 22 October 2017

Ryanair and Aer Lingus waiting on €16m verdict

The Commission determined the lower levy rate amounted to illegal State aid
The Commission determined the lower levy rate amounted to illegal State aid
John Mulligan

John Mulligan

Ryanair and Aer Lingus will find out this week if they'll be held liable for a total of €16m in taxes that the European Commission claims they owe the Government.

The Commission had previously argued that the way Ireland's now defunct air travel tax was structured meant shorter air routes had effectively benefited from illegal State aid.

It wanted Ryanair to pay the Government €12m in air taxes, and Aer Lingus to pay €4m.

But last year, the two airlines successfully overturned the Commission's previous determination to that effect.

The Commission then pleaded with the European Court of Justice that its original finding should be retained and that the airlines must pay up.

In July, one of the court's advocate generals advised that the two airlines should be made pay the taxes the Commission said were due. Opinions from the court's advocate generals are not binding, but are usually adopted by judges. The judges' final decision will be known on Wednesday.

The Government introduced the air travel tax in 2009.

It levied a €2 charge per passenger on flights up to 300km from Dublin, and €10 for distances more than that.

The Commission determined the lower levy rate amounted to illegal State aid, because it benefited airlines that primarily operated shorter routes.

The Government then instead introduced a flat €3 tax per passenger.

The Commission told the Government it would have to collect from both Aer Lingus and Ryanair, the difference between the two rates - €8 -that had previously been in operation, in respect of each passenger that had been charged the lower €2 levy between 2009 and 2011.

Irish Independent

Also in Business