Portuguese Carbon Tax
The new Portuguese Carbon Tax entered into force on 1 July 2021. It is levied on passengers departing from a Portuguese airport on board commercial flights. This new tax is truly an environmental tax because 97 percent of the tax proceeds go into a fund to finance emission reduction projects.
What is the Carbon Tax?
The Portuguese Carbon Tax (Taxa de carbono sobre viagens aéreas) amounts to 2 € per chargeable passenger. From 1 July 2021, it is levied on passengers departing from an airport situated in Portuguese territory on board commercial flights. The Carbon Tax is administered by the Portuguese National Civil Aviation Authority (ANAC).
Who is liable to pay the Carbon Tax?
The Portuguese Carbon Tax is levied on passengers carried on board commercial flights from Portugal. Ultimately, it is the aircraft operator that is liable for tax because it must pass on the tax to the passenger. According to ANAC's interpretation of the Ministerial Order 38/2021, the tax also applies to commercial flights carried out by business jet air charter companies. By contrast, non-commercial flights are exempt.
Several other passenger and flight exemptions apply, such as the exemption of infants, flights between mainland Portugal and Madeira / the Azores, flights following a forced landing at a Portuguese airport due to bad weather, technical reasons or other similar reasons, and flights performed in the framework of public service obligations.
It is also important to note that tickets sold before 1 July 2021 are not subject to the Portuguese Carbon Tax.
What Are the Tax Obligations?
As a participating aircraft operator, you must:
- appoint a fiscal representative, such as FCC Aviation, if you don’t have a fixed establishment in Portugal. The appointment is optional for EU based aircraft operators although ANAC recommends appointing a fiscal representative nevertheless.
- register for tax.
- submit a tax declaration by the 5th business day of the month following the reporting month unless you don't have any chargeable flights during that period.
- pay the carbon tax by the 20th day of the month following the end of the reporting month.
- display the tax in the advertised fare.