HSG research project to identify new approaches for the taxation of aviation

The project “Taxation of the Aviation Industry – A Holistic Approach” funded by the SNF with 513,443 Swiss francs aims to fundamentally analyse the tax treatment of aviation and develop specific recommendations for more effective taxation. The starting point of the project is the finding that the aviation sector in Switzerland is responsible for a significant share of greenhouse gas emissions – between 11 and 27 per cent, depending on the calculation method. At the global level, the share is currently around 2–3 per cent, but is growing continuously. However, current tax policy, both nationally and internationally, does little to reduce emissions. Rather, airlines often benefit from tax exemptions, particularly on fuel taxation. The research project should therefore identify ways in which this situation can be remedied.

First study of its kind

The project is divided into two parts during the 3.5-year period (2025-2028). The first part analyses the constitutional framework and the economic impact of so-called Pigouvian taxes, i.e. incentive taxes designed to internalise negative external effects. The second part is dedicated to the impact of existing international tax law on the aviation sector, in particular with regard to the OECD Model Tax Convention (Art. 8), which regulates tax allocations in cross-border traffic.

In addition to its practical relevance for legislation, the project also aims to contribute to research in fiscal law. This is the first comprehensive study to take a holistic view of the aviation industry from a fiscal, economic and environmental perspective. The resulting recommendations should not only provide impetus for Swiss tax policy, but also spark a broader discussion about the role of taxation in international climate policy. The project team consists of Prof. Dr Peter Hongler and Assistant Professor Dr Giedre Lideikyte Huber from the HSG's Law School. They are supported by Dr Andreas Wittmer from the HSG Center for Aviation and Space Competence, who contributes his expertise as well as industry-specific data and contacts.