@teerisara / Adobe Stock

Aviation Fuel Tax, MOT & CO2 Tax in Aviation

What is the impact of MOT or Energy Tax and other energy duties (e.g. CO2 tax) on air fuel (aviation tax)?  

Essentially, aviation fuel tax can be relevant at almost every stage of the value chain, like  

  • production  
  • transport  
  • storage  
  • trading and  
  • consuming air fuel in aircraft  

Depending on the part of the value chain, different aviation tax regulations and aviation tax regimes may apply without any taxation at this level of chain. In most of these cases special licenses may be required.  

If aviation tax is due and will be recharged to suppliers or air operators on fuel invoices, specific timely limited refund regimes can significantly reduce costs for fuel used for commercial air operations. 

Key-terms in this text

What is Aviation Fuel Tax / MOT?

The specific excise duty or energy tax levied on air fuel. In practice this will called often as MOT (Mineral Oil Tax). While commercial aviation is generally exempt from this tax under EU law a special tax monitoring is applicable and strict compliance rules regulate special suspension, exemption and refund regimes.

A regulatory status that allows qualifying air operators (such as commercial airlines transporting passengers or air cargo operators) to purchase MOT exempt at the uplift into the wing, provided they hold the necessary general or formal license from the customs office and certain formalities are met..

A retrospective process where air operators who were initially charged MOT by their suppliers claim those costs back from the customs authority. This requires proving that the fuel was used for a tax-privileged, commercial purpose.

Environmental levies and financial mechanisms (such as the EU-ETS 2) designed to put a price on carbon emissions. In aviation, managing these costs is becoming a critical part of fuel cost optimization alongside traditional MOT.

Impact of fuel tax / MOT on companies in the aviation business 

Depending on the market role as producer, storage company, supplier or carrier, various strict aviation tax compliance rules must be processed. In general, the commercial aviation business benefits from aviation fuel tax. However, in practice these benefits are embedded in various legal frameworks on different levels which will be interpreted uniquely in various countries.  

Furthermore, MOT/Energy Tax on fuel, carbon pricing in aviation—including CO2 tax aviation schemes and the CO2 tax impact on airlines via EU-ETS 2—represents a growing cost factor. Without proper fuel tax compliance management, these costs can escalate if formal operational criteria are not met. This is why professional aviation tax advisory and energy tax consulting are becoming indispensable for modern commercial air operations. This requires a special MOT refund for the consumers of air fuel.

Navigating aviation fuel tax: Our services are your benefit 

We structure your processes and manage communication with e.g. the customs office for you. Based on our long-term experience in aviation taxation, we maintain a close and valuable relationship with the local customs office responsible for the companies in the aviation business.

This is essential to effectively administrate aviation taxation obligations and the relevant tax benefits (either MOT exemption or MOT refund) legally regulated for the aviation business. We act as your experienced partner who will assist in that matter. 

Navigating aviation fuel tax

Our experts advise and support our clients: 

  • in getting licenses for applying special aviation fuel tax / MOT suspension and or exemption regimes regarding MOT

  • preparing tax returns and ensuring long-term aviation tax / MOT compliance 

  • in supporting in applying special MOT refund schemes reducing the costs on fuel 

  • in optimizing the costs from a CO2 tax perspective 

  • with aviation tax consulting for Civil law aspects, getting the optimal aviation tax / MOT position in the ongoing business in the supply chain 

  • in implementing processes for being compliant in aviation tax / MOT reporting and for cash flow optimization 

  • in advising in MOT audits 

  • in supporting appeals at the level of customs or in Court cases regarding MOT

  • in managing cross-border fuel taxation through our international Ecovis network 

High-quality service & interdisciplinary consulting

Air operators like

  • airlines offering scheduled flights for passengers,
  • air cargo companies,
  • air rescue and ambulance companies,
  • air operators for official flights and
  • military

are under certain conditions generally benefiting from the aviation tax / MOT for these flights. However, other operators active in the aviation business like

  • air carriers operating scheduled flights and air cargo companies operating smaller aircrafts
  • air operating companies in the general aviation business
  • special air operation companies of company groups and
  • so-called management companies

can benefit from the MOT under certain conditions as well. In practice, these companies will be charged with MOT (and CO2 costs) by their supplier. However, under certain conditions these companies can generally reduce their fuel costs in special MOT regimes.

If you operate not only in Germany, we can also connect you with experts within our Ecovis network in the relevant countries of your operations.

ECOVIS KSO ensures high-quality service and interdisciplinary consulting for its customers – precisely tailored to their needs and requirements. Get in touch with our expert Tino Wunderlich and his team.

Your expert in Aviation Fuel Tax, MOT & CO2 Tax in Aviation

Tino Wunderlich

Partner, Attorney-at-Law and Certified Tax Advisor

Contact:

Phone: +49 30-5858194-518

tino.wunderlich@ecovis.com

  • Aviation Tax Advisory
  • Energy & Electricity Tax
  • Sustainability
  • Value Added Tax (VAT)

  • Compliance & Advisory (Energy Tax & VAT)
  • Due Diligence (Energy Tax & VAT)
  • Support during Tax and Customs Audits
  • Administrative Appeal Procedures
  • Fiscal Court & Federal Fiscal Court Litigation (FG- and BFH-Proceedings)

FAQ: Aviation Fuel Tax / MOT

Scheduled air carriers are the primary beneficiaries of aviation fuel tax / MOT exemptions in the EU, but eligibility often extends to air carriers operating with smaller aircrafts, general aviation and management companies under specific conditions. Our aviation tax / MOT advisory team helps identify if your specific flight purposes—such as commercial air transport or specialized air operations—qualify for these tax benefits to reduce cost in air operation.

Air carriers paying aviation taxes / MOT to its suppliers can reduce this cost in special refund regimes proving that the fuel was used for commercial air operation. Success depends on rigorous documentation and meeting the strict formal criteria set by national aviation tax / MOT regulations.

Customs audits regarding aviation taxation / MOT are highly technical and require a deep understanding of both energy laws and aviation operations. An experienced partner provides energy tax / MOT consulting to defend your tax positions, minimize liability risks, and ensure that all cross-border fuel taxation issues are handled correctly.

Weight thresholds strictly dictate the operational procedure. In Germany, aircraft operating in commercial operation (passengers and cargo) with a Maximum Take-Off Weight (MTOW) of more than 12 tonnes can directly receive tax-exempt fuel. For aircraft with an MTOW below 12 tonnes, operators usually cannot get automatic exemptions at with the uplift; they must either apply for a daily customs permit or hold a Permanent Exemption Certificate (PEC) issued by the main customs office.

MOT exemptions under EU energy tax directives strictly exclude “private non-commercial aviation.” To qualify for an MOT refund or exemption, the aircraft must be used directly for commercial passenger/cargo transport or the commercial provision of commercial air services (e.g., aerial photography, flight training). If a company uses its own aircraft solely to fly employees to internal meetings or exhibitions, customs often classify this as non-qualifying private use, making professional advisory essential to assess your specific legal setup.

Holding a permanent MOT exemption shifts the burden of proof entirely to the operator. Operators are legally required to maintain correct and complete records of every single fuel uplift and flight. This includes matching original fuel receipts and supplier invoices with corresponding flight logs that clearly prove the commercial purpose of each leg. Furthermore, operators must file comprehensive annual uplift declarations to their responsible customs office to avoid immediate revocation of their license.

Furthermore, being compliant in other taxes like the VAT or air passenger tax is essential as well in order to remain the status being a company who is qualified as reliable for tax purposes. This is essential using the MOT benefits in the supply chain and optimizing the costs in air operation.

Do you have any further questions? Contact ECOVIS KSO!

Experts on this topic

No matching persons found.

You might also be interested in