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US airlines fight ‘cash-grab’ ticket tax

American airlines have launched a legal bid to strike out a tax which adds up to €45 onto every transatlantic plane ticket leaving German soil.

US airlines fight 'cash-grab' ticket tax
Photo: DPA

Airline trade organisation Airlines for America (A4A), which includes companies like Delta, United and Continental, filed a complaint on Friday.

In a statement, the group called the tax “a short-sighted cash-grab that will do more harm to the German economy than any short-term benefit that the tax revenue may bring the country’s coffers.”

The challenge was filed at Hesse’s state fiscal court in Kassel, taking issue with the German Air Transport Tax which took effect last January and put airlines serving the US into the highest of three tax brackets.

Until recently A4A, whose members operate 90 percent of American passenger and cargo flights, accepted the tax under protest.

But in a statement released on Friday, it said the decision was taken to make a challenge after legal advice suggested the tax violated several long-standing international agreements, including the US-EU Open Skies Agreement.

A4A feel that passengers coming from the US to Germany already pay enough taxes, the statement said.

“Germany cannot arbitrarily close its budget gap on the backs of the U.S. airlines,” it said.

The organisation announced in the statement that they would be filing a detailed complaint with the German Fiscal Court within the next two months at the same time it urges a referral of the case to the German Federal Constitution Court.

The Local/jcw

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CROSS-BORDER WORKERS

Germany and France extend Covid tax breaks for cross-border workers

Germany and France have agreed to extend the relaxation of tax rules for cross-border workers until the end of the year.

Cross-border workers commute by car but they can for now continue to work at home
Cross-border workers usually have to commute but can for now continue to work at home.. Photo: Fabrice Coffrini / AFP

The agreements between France and the governments of Belgium, Luxembourg, Germany, Switzerland and Italy avoids double taxation issues for anyone travelling across the French border to or from those countries in order to work.

During the pandemic, tax rules were eased to allow French cross-border employees, like their counterparts in Belgium, Luxembourg, Germany, Switzerland and Italy, to work from home without having to change their tax status.

The deals, which were established at the beginning of the health crisis in March 2020, were due to end on September 30th – and would have plunged cross-border workers still working from home because of the health crisis into renewed uncertainty over their taxes.

The latest extension of these agreements means there’s no confusion over where a cross-border worker pays their taxes until December 31st – for example cross-border workers who work in Geneva but live in France, who normally pay their taxes and social security contributions in Switzerland. 

Under normal circumstances, anyone living in France who works in Switzerland can spend no more than 25 percent of their time working from home. If they exceed this time limit, they would have to pay these tax charges tin France rather than in Switzerland, which would be much higher.

The agreements between France and Belgium, Luxembourg, Germany and Switzerland “provide that days worked at home because of the recommendations and health instructions related to the Covid-19 pandemic may … be considered as days worked in the state where [workers] usually carry out their activity and therefore remain taxable,” according to the statement from the French Employment Ministry.

In the case of Luxembourg, days worked from home because of the health crisis are not counted in usual the 29 day limit.

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