50 SKY SHADES - World aviation news

Airbus spared 1 billion euro tax bill in Safran space tie-up

Download: Printable PDF Date: 04 May 2016 00:42 category:
Publisher:
Airbus spared 1 billion euro tax bill in Safran space tie-up - Manufacturer publisher
Tatjana Obrazcova
Country: France Aircraft: Airplanes
Source: Reuters

Airbus Group  has been spared a 1 billion euro ($1.15 billion) tax bill thanks to a deal with the French government over the company's plans to set up a new space launcher venture, a person familiar with the discussions said.

The company was facing the hefty tax charge over plans to combine space launch activities with engine maker Safran, under which Airbus would be paid 800 million euros in cash to preserve an equal stake in Airbus Safran Launchers.

Under some interpretations of French tax rules, Airbus Group could have been taxed on the value of the assets being transferred and not solely on the lump sum from Safran.

The aerospace groups said on Monday that they had signed a deal over the industrial phase of their project, which is designed to overhaul Europe's Ariane space-rocket program in the face of low-cost U.S. competition.

The agreement had been delayed by months of discussions over whether Airbus Group should be taxed as though the plan involved a sale of space assets to the new venture.

"If the operation had been considered as an asset sale, Airbus Group would have had to pay a billion euros in tax," the source said, asking not to be identified because of the confidentiality of the discussions.

Airbus Group will still have to pay some tax on the lump sum from Safran, but the source declined to say what the newly agreed bill would be.

Airbus declined to comment and French finance ministry officials could not be reached for comment.

Officials involved in setting up the venture say it is unusual because the two companies value its strategic importance in equal measure and both are locked in for the long term.

The project took more than a year to finalize, largely because French tax regulations are not easily applicable to such a partnership of equals, people involved in the discussions said.



Loading comments for Airbus spared 1 billion euro tax bill in Safran space tie-up...


Recommended

Safran celebrates successful start of Open Rotor demonstrator tests on new open-air test rig in southern France

Safran is celebrating the success of the first ground tests of the Open Rotor demonstrator engine in Istres, southern France. The ceremony marking this milestone was attended by Clara de la Torre...

ATR 72-600 Flight Simulator in Paris Receives EASA Certification

ATR, the world’s leading turboprop manufacturer, has received certification from the European Aviation Safety Agency (EASA) for its new ATR 72-600 Full Flight Simulator (FFS) based at ATR’...

Boeing Forecasts Stable Growth and Funding Diversification for Aircraft Financing in 2018

Approximately $139 billion in new aircraft funding needed in 2018, up $17 billion from 2017 Innovations in aircraft finance bolster customer choices in a healthy financing market Boeing ant...

Boeing, Turkish Airlines Celebrate the Airline's First 777 Freighter

Boeing and Turkish Airlines celebrated the delivery today of the airline's first 777 Freighter, the world's longest-range twin-engine freighter. The airplane and a second freighter on ord...

Milestone in Swiss Economic History: Pilatus Obtains PC-24 Type Certificates

On 7 December 2017 Pilatus obtained type certificates from the European Aviation Safety Agency (EASA) and the US-American Federal Aviation Administration (FAA) for the first ever Swiss business jet. C...