ACC40820 Aviation Tax

Academic Year 2019/2020

This module will provide students with an insight into tax policy making, explaining why Ireland is a favourable location and major international hub for aircraft finance and leasing. The Aviation Tax module will address the key tax issues facing aircraft leasing companies, whereby students will study the tax legislation and case law within which the aviation leasing sector operates.

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Curricular information is subject to change

Learning Outcomes:

Having completed this module students will be able to:
1. Understand and critique national and international tax policies surrounding the aviation sector.

2. Understand the impact of tax residence/ permanent establishment /taxable presence in the context of aircraft leasing.

3. Explain the trading status of aircraft leasing companies drawing upon case law and revenue rulings.

4. Explain the taxation treatment of lessors and lessees and the link to their accounting treatment.

5. Understand income tax considerations for senior executives of aircraft leasing companies

6. Critique the potential impact of Base Erosion and Profit Shifting (BEPS) on the aircraft leasing sector.

Indicative Module Content:

Lecture No. Topic
1. An Introduction to Tax
2. An Introduction to Tax Policy Making
3. Tax avoidance and tax evasion
4. The charge to tax: The meaning of tax residence for individuals
5. The charge to tax: Tax residence for companies

6. The meaning of a trade and the trading status of aircraft leasing companies
• Badges of Trade, Revenue Rulings re trading status of aircraft leasing companies
• Income qualifying for 12.5% corporate tax rate

7. Tax depreciation / capital allowances and the aircraft leasing sector
• The meaning of plant and industrial building
• Qualifying conditions for tax depreciation – wear and tear allowances, balancing allowances and charges
• Tax depreciation for aircraft in Ireland, including MRO

8/ 9. Taxation of Lessors and Lessees
• The link between lease accounting and the taxation of leases
• The concept of deferred tax
• Disposal of leased assets – the tax treatment of gains and losses on disposal
• The tax treatment of foreign exchange transactions
• Aercap Annual Report

10. Guest Lecture Tom Woods KPMG: Comparative international tax policies for aircraft leasing and typical ownership structures
Finance structures and related tax considerations
• Finance vehicles used – standard companies, S.110 companies
• Debt instruments used
• Securitisations

11. Guest Lecture: Martin McCoy, SMBC Aviation Capital.
Transfer tax considerations when buying and selling an aircraft
Withholding tax considerations
Access to tax treaties
i. Residency, beneficial ownership
ii. Relevant treaty articles
iii. Treaty shopping and anti conduit provisions
• Ireland’s tax treaty network
• Tax clauses in leases

12. Base Erosion and Profit Shifting (BEPS) and its potential impact on the aircraft leasing sector

Module Summary/Wrap up

Student Effort Type Hours
Lectures

24

Practical

30

Specified Learning Activities

30

Autonomous Student Learning

100

Total

184

Requirements, Exclusions and Recommendations

Not applicable to this module.


Module Requisites and Incompatibles
Not applicable to this module.
 
Assessment Strategy  
Description Timing Open Book Exam Component Scale Must Pass Component % of Final Grade
Assignment: Individual assignment: Annual report/Prospectus analysis of tax issues Unspecified n/a Alternative linear conversion grade scale 40% No

20

Assignment: Team assignment: 6 x 2000 word tax assignments Unspecified n/a Standard conversion grade scale 40% No

30

Examination: Case Study Examination 2 hour End of Trimester Exam No Alternative linear conversion grade scale 40% No

50


Carry forward of passed components
No
 
Resit In Terminal Exam
Spring Yes - 2 Hour
Feedback Strategy/Strategies

• Group/class feedback, post-assessment

How will my Feedback be Delivered?

Not yet recorded.

Some Reading Material
Useful Websites: www.taxireland.ie
www.revenue.ie
www.irlgov.ie/finance
www.onbusiness.ie
www.esri.ie
www.cso.ie
www.publicpolicy.ie

Reading Material:
1. From Boraimhe to Bit – the Art of Taxation (1st Edition)
Author: Moira O’Halloran
Publisher: Irish Tax Institute

2. The Economics of Taxation
Authors: Simon James and Christopher Nobes
Publisher: Prentice Hall

3. Taxation: Policy and Practice
Authors: Andy Lymer and Lynne Oats
Publisher: Fiscal Publications

5. Irish Taxation: Law and Practice, 2019/2020
Author: Irish Tax Institute
Publisher: Irish Tax Institute

The above texts are available in the Campus Book Shop and in the Library.

In addition to the above, students are recommended to read current articles and
periodicals during the year, in particular:

Financial Times
Irish Tax Review
Accountancy Ireland
Business and Finance
British Tax Review
Fiscal Studies

These journals are available in the library

Most Sunday newspapers have a regular business/taxation advice section.

TAXFIND (Access Sponsored by KPMG)
TaxFind contains a comprehensive collection of tax related legislation, commentary, case law, seminars and Revenue documentation.

TaxFind Login Details
http://www.taxfind.ie
Username: 29843
Password: 12F76

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