No hydrocarbon tax exemption for executive transport

The Directorate General of Taxes (DGT) has issued a relevant ruling regarding the application of the hydrocarbon tax exemption for fuel used in aircraft. The inquiry focused on determining whether companies could benefit from this tax incentive when using aircraft, whether owned or leased, to transport their executives or board members in the performance of their duties.

What the DGT has ruled

The administration has ruled that it is not possible to apply the exemption established in Article 51.2.a of Law 38/1992 on Excise Duties in these cases. The ruling is based on the interpretation of Directive 2003/96/EC and the jurisprudence of the Court of Justice of the European Union (CJEU).

According to the resolution, for the supply of fuel to an aircraft to be subject to exemption, the aircraft must be used directly for the provision of air transport services for consideration. The DGT establishes that the transport of personnel for business purposes cannot be equated to the commercial activity necessary to access this tax benefit.

What this means for you

This ruling has a direct impact on the tax management of companies that have air transport means for their management structure. If your organization uses aircraft to facilitate the mobility of its executives, you must consider that the cost of fuel will include the hydrocarbon tax, as the requirement of commercial air transport activity is not met.

What should be done

In this situation, it is necessary to review the operating costs of the company's air fleet and ensure that the accounting correctly reflects the tax burden on fuel. Since the exemption is conditional on the provision of air services to third parties, any use intended exclusively for the company's internal mobility falls outside the scope of this benefit.