Initiated by the German Federal Government, the Bundestag is about to pass an Air Travel Tax Bill (Luftverkehrsteuergesetz), to introduce a tax on passenger air travel departures from Germany.

While the new law is proposed to take effect on 1 January 2011, it is also intended to cover all legal transactions concluded as from 1 September 2010 conferring a right to travel as of 1 January 2011, so it is understood that some airlines have already started to charge their customers for the expected tax through increased ticket fares.

All airlines performing passenger flights departing from Germany will be affected. Those airlines not resident in Germany will have to nominate a fiscal representative to comply with the new tax law, as airlines or their fiscal representatives will have to file a monthly tax notice.

The new tax is motivated not only by financial but also by environmental reasons. The German government aims at increasing the cost of passenger air travel in order make this means of transportation less attractive. However, cargo flights as well as private air travel are not covered by the new tax.

The tax shall be assessed based on the length of the flight (with exceptions). It is planned for three tariffs to be introduced:

  • EUR 8 per passenger for shorter destinations (including, however, flights to destinations in Russia and overseas French territories);
  • EUR 25 per passenger for medium length flights (such as destinations in the Middle East); and
  • EUR 45 per passenger for long distance flights (such as the Americas).

The Bundestag reserves the right to reduce the tariffs in order to alleviate additional burdens for airlines when being included into the European Emissions Trading Scheme starting in 2012.

The consistency of the draft law with the German Constitution is still subject to discussions. This may lead to modifications of the draft bill prior to its approval by parliament.