The Ministry of Economy and Finance issued Instruction no. 009 on Tax Allowance on Withholding Tax and Specific Tax for Airline Companies dated 7 June 2024 (“Instruction no. 009“). Instruction no. 009 intends to reduce the tax burden on airline companies leasing aircrafts from offshore companies, as well as to alleviate the burden on people traveling by air.
The tax allowances provided under Instruction no. 009 are as follows:
- The withholding tax rate for aircrafts leased from offshore companies by domestic airline companies is reduced from 14% to 10%.
- The specific tax rate for air transport service of passengers, regardless of whether the service is carried out by domestic airline companies or offshore airline companies, is reduced from 10% to 5%.
- The allowances as stated in point 1 and point 2 above are valid for a period of three years from 1 June 2024 to 31 May 2027.
If you have any queries on the above, please feel free to contact our team members below who will be happy to assist.
Disclaimer
Rajah & Tann Asia is a network of member firms with local legal practices in Cambodia, Indonesia, Lao PDR, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam. Our Asian network also includes our regional office in China as well as regional desks focused on Brunei, Japan and South Asia. Member firms are independently constituted and regulated in accordance with relevant local requirements.
The contents of this publication are owned by Rajah & Tann Asia together with each of its member firms and are subject to all relevant protection (including but not limited to copyright protection) under the laws of each of the countries where the member firm operates and, through international treaties, other countries. No part of this publication may be reproduced, licensed, sold, published, transmitted, modified, adapted, publicly displayed, broadcast (including storage in any medium by electronic means whether or not transiently for any purpose save as permitted herein) without the prior written permission of Rajah & Tann Asia or its respective member firms.
Please note also that whilst the information in this publication is correct to the best of our knowledge and belief at the time of writing, it is only intended to provide a general guide to the subject matter and should not be treated as legal advice or a substitute for specific professional advice for any particular course of action as such information may not suit your specific business and operational requirements. You should seek legal advice for your specific situation. In addition, the information in this publication does not create any relationship, whether legally binding or otherwise. Rajah & Tann Asia and its member firms do not accept, and fully disclaim, responsibility for any loss or damage which may result from accessing or relying on the information in this publication.
