Airlines furious as Brazil lists Ireland as tax haven

Brazilian airlines are up in arms over a decision by Brazil’s tax authority to list Ireland as a tax haven, which means about E273.7m in new taxes on aircraft leases for carriers struggling to regain profitability. “The impact is brutal,” said Eduardo Sanovicz, head of Brazilian airline association Abear, who will meet Monday with tax authorities in Brasilia to try to reverse the surprise tax decision taken without consulting the airline industry. Sanovicz said 60% of the 520 aircraft flying commercially in Brazil are leased from companies registered in Ireland, where they enjoy favourable tax rules. Companies based there will have to start paying a 25% tax rate on transactions with Brazilian companies. Brazilian airlines are reeling from high jet fuel costs and the drop in demand for air travel, and say they have no room to pass additional taxes along. <br/>