The impact of international tax reform on aviation finance
Recent global tax developments and how they may affect lessors and airlines
Pieter Burger looks into the recent global tax developments and how they may affect lessors and airlines.
Last year was extraordinary in many, many respects. Apart from significant unexpected political developments, unprecedented sporting achievements, the hottest year on record, to name but a few, it was also a year marked by incredible leaps forward in international tax reform.
Following on from the issue of the final deliverables of the OECD’s Base Erosion and Profit Shifting (BEPS) plan in October 2015, the EU Anti-Tax Avoidance Directive (ATAD) was unanimously approved in June 2016 – a consensus that seemed a long shot when the draft proposal was first published in January 2016.
In addition, of significant importance to aircraft lessors and airlines is that on 24 November 2016 the agreed text of the Multilateral Convention to Implement Tax Treaty-Related Measures was released. More than 100 countries participated in its negotiation with countries expected to sign this convention on 5 June 2017. More than 2,000 double tax treaties (about two-thirds of the worldwide total) could be amended through this new convention, with the first changes likely to have effect from as early as 1 January 2018.
Read the full impact of international tax reform on aviation finance article for more information.