Portugal’s New 2023 Carbon Tax on Passenger Duty for Flights

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Portugal National Civil Aviation Authority (ANAC) has introduced a new carbon tax targeted primarily at business aviation, effective from July 2023 for aircraft with up to 19 seats for flights departing from Portugal or its territories.

This tax, resembling a 2021 measure for airline passengers, is significantly more burdensome for private aviation flights.

Here’s everything you need to know.


Understanding the New Tax

This new levy, which took effect on July 1, 2023, has evoked discussion and confusion within the industry. Unlike emissions-based taxes common in other regions, this tax is a new fiscal obligation to address different regulatory objectives.

The tax applies to all flights departing from Portugal, including tech stops in the Azores islands, with exemptions for certain situations like emergency diversions, electric aircraft, state-owned aircraft, and specific service-oriented flights.


Grace Period

ANAC has extended a grace period for aircraft operators, offering time to adapt to the new tax mandate. This grace period will help ease the transition for operators as they acclimate to the new fiscal environment.


Administrative Hurdles

One way to pay the fee is to register with ground handlers. However, a note of caution: registering with Ground Handlers in Portugal involves subscription fees for fiscal representation. Additionally, the necessity for Power of Attorney documents can present a challenge within corporate structures. While seemingly daunting, these administrative hurdles are navigable with the proper guidance and support.


How Universal Can Assist

Universal has recognized the challenges posed by the new Portugal Carbon Tax and is actively working toward simplifying this fiscal obligation for operators. Efforts are underway to finalize a solution representing operators and catering to the tax dues for any Universal Trip Support Missions. Once operational, Universal has committed to retroactively addressing any fees arising from the Portugal Carbon Tax from its inception date of July 1, 2023.

The aim is to minimize the dependency on Ground Handlers for meeting the carbon tax payments, thereby providing a streamlined approach towards compliance.


Conclusion

More details on this solution will be released soon, offering clarity and a well-defined pathway for operators to comply with the new tax mandate. Universal is working on a solution to help simplify the process for its customers and will share more information soon.


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