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Greek VAT exemption for airlines

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Greek VAT exemption for airlines

Greece currently allows a VAT exemption on air passenger transport provided a number of conditions are met. The main requirement is that more than 50% of the total revenue of the airline comes from international flights. The Greek government has now clarified the application of this condition on Greek permanent establishments of foreign airlines. In this respect, permanent establishments of foreign companies must take into account their total income and not only the revenues from the Greek branch. This approach allows these permanent establishments to benefit from the exemption since most of the income of the legal entity is abroad. The new approach was published by the authorities in Circular 1130/2016.

The VAT exemption on air transport includes accessory transactions such as imports, repair, aircraft equipment and other goods and services related to the aircraft activity.Member states can introduce exemptions on air, sea and road passenger transport according to their internal policies. This optional regime complicates things for international airline businesses due to costs complying with different criteria across Europe. The Commission has published a comprehensive report on the applicable VAT rates and exemptions on passenger transport services. You can access the report here.

  • By Marosa EU VAT
  • Publicado 27/10/2016 19:11