Airline groups: US plan to tax Gulf carriers a ‘dangerous precedent’
A proposal by the US to tax foreign airlines could enact tit-for-tat measures and effectively end Open Skies agreements.
The US tax measure was added into a bill last week by Johnny Isakson, Republican senator from Georgia, home to Delta Air Lines.
The amendment calls for airlines to pay corporation tax if the carrier’s home country has fewer than two arrivals and departures per week operated by major US airlines.
This is viewed as a move specifically targeting Gulf carriers.
"Foreign governments even those not directly affected by the proposed language (in the bill) could be tempted to follow the US example and impose reciprocal taxes in return," the International Air Transport Association said.
"If enacted, the provision would upend decades of precedent — which the US has long supported — on the taxation of international aviation."
"The notion of imposing income tax on foreign carriers belongs to the first half of the last century, not today’s globalized world," Arab Air Carriers Organisation secretary general Abdul Teffaha told UAE based news outlet The National.
"This could be very dangerous. Ultimately, it would turn back the clock to a pre-Open Skies era when countries used to impose restrictions on carriers," he added.
Abu Dhabi based Etihad Airways called it ‘the result of continued anti-competitive efforts by one or more of the ‘Big Three’ US legacy carriers.’
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Editor for TravelMole North America and Asia pacific regions. Ray is a highly experienced (15+ years) skilled journalist and editor predominantly in travel, hospitality and lifestyle working with a huge number of major market-leading brands. He has also cover in-depth news, interviews and features in general business, finance, tech and geopolitical issues for a select few major news outlets and publishers.
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