Eoin Ó Broin (Dublin Mid West, Sinn Fein)
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47. To ask the Minister for Finance if he will reconsider the introduction of a tax on private jet travel, in light of the environmental impact and disproportionate carbon emissions associated with private aviation; the recent assessments of such a tax and its potential effectiveness in reducing emissions; and his views on the measures being considered to address the environmental impact of luxury travel. [45426/24]

Jack Chambers (Dublin West, Fianna Fail)
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Taxing fuel usage is a policy that is employed across most transport modes to reduce emissions. However, this is not a policy approach that is common for the aviation sector. Ireland’s tax policy in this area has been formulated within the parameters of international agreements and EU law, along with national cross-cutting policy considerations. Article 24 of the 1944 Chicago Convention on International Civil Aviation prohibits taxing fuel arriving to an airport on a plane. This prohibition does not extend to fuel taken on board while grounded. However, EU Member States’ flexibility to tax such fuel is restricted under the rules set out in Council Directive 2003/96/EC, commonly referred to as the Energy Taxation Directive (ETD). The ETD obliges EU Member States to exempt jet fuel and aviation gasoline from taxation for intra-EU, and extra-EU commercial flights, except where a bilateral agreement on taxing jet fuel is in place. No bilateral agreements are currently in place and all Member States apply the ETD mandated exemption to jet fuel used for commercial aviation. In Ireland’s case this means that jet fuel used for commercial aviation is fully exempted from Mineral Oil Tax (MOT). Under the ETD Member States have more flexibility regarding taxation of aviation gasoline, which is much less commonly used than jet fuel. Under MOT law aviation gasoline is currently partially exempted, with an effective MOT rate of €456.51 per 1,000 litres applicable to such fuel used for commercial air navigation.

In line with the current ETD all fuel used for non-commercial aviation is subject to MOT. This means that standard MOT rates apply to jet fuel and aviation gasoline used in an aircraft by its owner, or the natural or legal person who enjoys the use either through hire or through any other means, for other than commercial purposes and, in particular, other than for the carriage of passengers or goods, or for the supply of services for consideration, or for the purposes of public authorities. Current MOT rates, including those that apply to jet fuel and aviation gasoline used for non-commercial aviation, are published on the Revenue website at www.revenue.ie/en/tax-professionals/tdm/excise/excise-duty-rates/energy-excise-duty-rates.pdf.

The EU’s ‘Fit for 55’ package, which was announced in July 2021, proposes to revise and update EU legislation and to put in place new initiatives with the aim of ensuring that EU policies are in line with climate goals. Under the package, significant changes to the ETD are being proposed and these are the subject of ongoing discussions at European Council meetings with Member States. The ETD proposals include the introduction of mandatory taxation on aviation fuels used for commercial purposes. It is important to note that the ETD proposals have not yet been agreed by Member States. Both the scope of mandatory taxation and the minimum rates are still under consideration, along with potential timeframes for implementation. Ireland is actively engaged with ongoing negotiations.