Increased administration effort

In Germany, a carrier (operating or contractual) is, in general, value added tax (VAT) liable along the domestic part of the flight route. The German domestic part of the flight route of an international passenger transport service may include flights from:

  • a foreign airport to a German airport;
  • a German airport to a foreign airport; or
  • a foreign airport to a foreign airport over German territory.

However, it is possible for the carrier to apply for VAT remission according to Section 26(3) of the VAT Act. If the carrier is a German entity, the remission applies without further requirements other than an invoice without VAT. In contrast, if the carrier is a foreign entity, the tax relief must be mutual (ie, the state of the registered office of the foreign carrier must grant tax relief to German carriers as well). The Ministry of Finance has issued a list of the respective states.

Tax authorities' statement

On February 7 2018 the tax authorities issued a statement with some specifications regarding Section 26(3) of the VAT Act in order to harmonise the handling of the provision throughout Germany:

  • Tax remission is not applicable for helicopter flights between German onshore and offshore wind farms outside a 12 sea mile zone.
  • Domestic and foreign carriers must record payments for international passenger transport services that fall under Section 26(3). Further, they must declare such payments in the preliminary monthly VAT returns and annual VAT returns. The lack of records remain unobjected if the foreign carrier in Germany solely renders international passenger transport services and if the German tax authorities are permitted to estimate the payments for the domestic part of the flight route. The carrier must explicitly apply for an exception regarding the declaration of the payments in the preliminary monthly VAT returns. The payments must be declared in the annual VAT return.
  • Tax remission may not be granted if the carrier applies for it ex officio. However, before the VAT legally accrues, tax remission cannot be granted. The competent tax office can assure the carrier beforehand that the remission can be granted only if the respective requirements are met. The competent tax office will examine whether the carrier meets the requirements over periodical intervals of up to three years.

For further information on this topic please contact Johannes Stehr at Arnecke Sibeth Rechtsanwaelte by telephone (+49 69 97 98 85 0) or email ( The Arnecke Sibeth website can be accessed at

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