Who pays the Export Taxes when Buying and Selling Aircraft?

The payment of export taxes when buying and selling aircraft can vary depending on the specific transaction, the countries involved, and the applicable tax laws. In general, the responsibility for paying export taxes is negotiated and agreed upon between the buyer and seller as part of the aircraft purchase agreement. In some cases, the buyer may be responsible for paying any applicable export taxes. This could be the case when the aircraft is being exported from one country to another, and the buyer’s country imposes taxes on imported goods, including aircraft. In other situations, the seller may agree to cover the export taxes as part of the negotiated purchase price. This might happen if the seller wants to make the transaction more attractive to the buyer or if it is customary in the aircraft sales market of the specific region. Sometimes, the buyer and seller may agree to split the cost of export taxes. This arrangement could be a compromise when both parties want to reach a mutually beneficial agreement. There may be instances where export taxes are exempted or reduced due to specific trade agreements or tax laws between the countries involved. In such cases, neither the buyer nor the seller might need to pay export taxes.

It’s essential for both the buyer and seller to thoroughly understand their respective tax obligations and potential liabilities during the negotiation and closing stages of the aircraft transaction. Consulting with aviation attorneys or tax professionals who are knowledgeable about international aircraft sales can be beneficial to ensure compliance with all relevant tax regulations and to facilitate a smooth transaction. Additionally, the terms regarding the payment of export taxes should be clearly documented in the aircraft purchase agreement to avoid any misunderstandings or disputes.

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