Denmark to tax Danish airline staff based in Ireland
Denmark said on Thursday it had signed a double taxation treaty with Ireland to ensure Danish citizens who work for Irish-registered airlines are taxed in their home country.
The previous agreement “resulted in unequal tax treatment for Danish companies,” the Danish tax ministry said in a statement.
Irish budget airline Ryanair last year came under criticism when it emerged around 60 of its cabin crew could pay Irish tax rates even though they lived in Denmark, which boasts the world’s highest taxes as a part of gross domestic product (GDP).
“The fight against social dumping is high on the government’s agenda, and we… have been very aware that there were a number of problems in relation to taxation of airline crew,” Danish Minister for Taxation, Morten Oestergaard, said in a statement.
A Ryanair spokeswoman in Denmark said the company “already complies with all rules and will comply with any changes in rules,” without elaborating.
Ryanair last month launched an appeal against a court ruling ordering it to pay nearly nine million euros ($12.2 million) in damages and interest for breaching French labour laws.
A French court ordered the damages in October and fined the company 200,000 euros after ruling that Ryanair illegally gave locally based staff Irish contracts to save money on payroll and other taxes.
Ireland too is facing scrutiny by Brussels over whether its carefully crafted laws allow companies to avoid paying higher taxes elsewhere, potentially amounting to illegal state aid.
Budget carrier Norwegian is planning to operate its cut-price flights between Europe and the US through a subsidiary based in Ireland, but has faced resistance from US airlines and unions who accuse it of trying to dodge laws and regulations.
The US Department of Transportation has delayed a decision on whether to grant the Irish subsidiary a foreign carrier permit.
A spokeswoman for Norwegian, Europe’s third-largest budget airline, said the company was unable to comment Thursday on whether the Danish tax treaty would affect any of its staff.
