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Ryanair Italy Tax Situation

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Ryanair Italy Tax Situation

Old 2nd Jan 2014, 09:13
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Ryanair Italy Tax Situation

Hi everyone.

Im working for Ryanair (Brookfield) and have just been given a base in italy and am very confused with the current tax situation.

As I am aware I have to now have to pay tax on italy domestic flight in italy and for all other flights I need to pay tax in Ireland.

I know these questions have probably already been asked but...

We operate Irish aircraft so are governed by Irish tax laws.
We only get paid for scheduled block hours so we officially don't get paid any money for whilst we are on the ground in italy or any another country. So why do we have to pay tax in italy for domestic flights?

Also as we don't officially work in italy or get paid for whilst we are in italy, why do we need to pay social security there? Every time we get off the aircraft and cross the boarder into italy we are not working so its like us being on a holiday?

I'm no tax expert but I want to be paying social security in the UK, where I live so it will go towards my pension etc..

Anyone else have any experience with the italy situation?

Thanks
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Old 2nd Jan 2014, 09:40
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I'm no tax expert
Therein lies the problem. Even real tax experts don't have straightforward answers for this, and as pilots we are certainly not tax experts. You'd probably need to be qualified as a tax lawyer, accountant and economist to stand a chance of dealing with this correctly yourself.

Your roster should make your home base clear. If your allocated place of work is in Italy and you spend most of your time in Italy then the Italian tax authorities will want their pound of flesh. If your contract is Irish and you work on Irish registered aircraft the Irish Revenue will probably want you to pay tax and PRSI to them. As you are British and have considerable ties to the UK presumably including a house, car, bank accounts etc, the HMRC will probably want you under their jurisdiction.

The whole thing is a mess and a source of stress to pilots. Good luck in your hunt for a straight answer. I don't think your tax and social regime will simply come down to personal choice.
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Old 2nd Jan 2014, 10:03
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Try REPA website, think there's a thread about the very subject. RPG/IALPA should also be able to help.

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Old 2nd Jan 2014, 11:09
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Thanks guys...

Its an absolute nightmare.

I feel like i work for an accountant and not an airline at the moment. Iv probably spent more time studying tax law than i have studying for flying.. ha ha
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Old 2nd Jan 2014, 11:15
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it should be like in easyJet , good local contracts and paying tax in Italy . end of story.

Ryanair is getting in all kinds of trouble because of these Irish-only-contracts
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Old 2nd Jan 2014, 12:26
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The problem is Ryanair are NOT getting in enough trouble, and the poor sods that are living every day waiting for the knock on the door ARE.

Even for those who are trying to be "compliant" it is a minefield, as the OP has explained.

Sad, that so many myopically rushed to accept this "Contractor" cr@p all those years ago, with no thought to the future prognosis.

The old saying "if it seems too good to be true, it probably is" applies.

The original contractors earned a nice stash from it, but the current crop are certainly paying for their predecessors lack of farsightedness.
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Old 2nd Jan 2014, 12:40
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For a great many the choice was not between employee and contractor but between contractor and unemployed, but it's always easier just to blame and punish the little guy.
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Old 2nd Jan 2014, 13:40
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EU can of worms

The situation is very confused with no joined up thinking between EU states, unfortunately the cerably challenged EU rule makers can't get their walnut sized brains around the fact that some one can be employed by a company based in state A, live in state B and be based in state C.

This person will be largely using the system in the state they live but currently the EU rules say they should pay their social tax in the state they are " based" in, dispite the fact that they will never call on the social system in this state.

The state the company is registered in might well want the income tax.

So it is more than posable to pay social tax in one EU state, income tax in another EU state, and live in another EU state who won't have a call on any money from you because you have paid all your dues to the two other states.

This is a situation that will not please the EU state you are resident in, but it is amazing what seems to be a good idea when you work in the EU offices in Brussels.

No wonder UKIP is getting so popular in the UK.
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Old 2nd Jan 2014, 13:44
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I agree, that is the case in recent years, but. . .this "cancer" in our profession commenced back in around 2004/05 (if memory serves me well) when Ryanair offered (and at that stage it was "offered" as opposed to "obliged" ) this option. Many jumped at it, due to the short term earning potential, which was considerable, particularly for line tng Capts. . . but, of course, it couldn't last forever.

I am fully aware that for some years there has been no choice & to those faced with that "rock & a hard place " decision I sympathise, but the fault is as much due to the short term greed of colleagues who preceded you, as it is to corporate greed.
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Old 2nd Jan 2014, 13:46
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Just like the other wonderful EU idea of the spongers employed therein paying Nada in the way of tax.




or, even better




Last edited by captplaystation; 2nd Jan 2014 at 14:49.
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Old 2nd Jan 2014, 13:51
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Well the only thing I can tell you for sure, is that new EUROPEAN legislation on this matter says that from june 2012 you are forced to pay social security where you're based (I mean the company should actually do it, but becouse you're self employed subcontracting for your airline, well...it's all down to you ) no matter where you actually live! And this is a pain in the becouse some european countries i.e. Italy have a very high one (Italy 27%?) or even worse (Hungary 44%). And this is the only thing known for "sure" .
Then it comes to real taxes and here there hasn't been any clarification yet on what should be done... You should ask to people based there which are non italians.
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Old 2nd Jan 2014, 15:21
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Thanks for all the replies.

Does it make a difference that as a Ryanair contractor operating Irish aircraft that in theory we don't actually earn any money in the state that we are based as we only get paid per block hour which means that we only get paid whilst we are on board an Irish aircraft which as I understand it is classed as Irish territory?
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Old 2nd Jan 2014, 15:23
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DON'T listen to anyone connected with the agency you are contracted or your 'accountant'. Speak to IALPA, register as a member, sign up to REPA and next time you punt £30k+ on a type rating, do some research first.
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Old 2nd Jan 2014, 15:32
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Myself and everyone I know on my type rating course all did a lot of research before continuing on with Ryanair and we were all fully aware how it works.

I know I have to pay tax a social security somewhere but with everything changing all the time I just want to be sure that I'm paying things in the correct place.
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Old 2nd Jan 2014, 15:37
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Matt 83

Wellcomme to the Club and a happy new year.

You need to promtly join the RPG Italian Tax Group, They have independent, proffesionals on the case.
You have to pay in Italy.
Not a cent in Ireland , unless You were daft enough to make an Irish company while You are British and residing in UK ( you did ?!)
Your perception of were You have to pay tax according to were You fly is a pipedream. EU has confirmed the old and logic 183 day rule according to Your fixed Base.
Floaters are the onlyones that can select homecontry company and tax or Irish.
I have commuted and freelanced since a bancrupsy. in 1999, allways paied at home ,all documented.
The local IRS came knokking last year. Looking back 10 years,,,uuups!
All clean , nothing wrong.
Can You all say and PROVE it, burden of proof is on You??!

People will go to jail on this one. Good luck All.
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Old 2nd Jan 2014, 17:39
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I feel like i work for an accountant and not an airline
that's 'cos, technically, you work for Brookfield, isn't it ? (clue: brookfield isn't an Airline)
Do as the others have suggested, join the relevant Pilot groups...It may seem like a waste of money, but events like this will show the true value, as costs and legal advice is shared among the membership.


Indeed, some organisations refuse help with any problems that existed prior to the member joining, which is quite reasonable, really...why should the existing members pay to subsidising resolving your problem.?....how many get the immediate help they want, then don't renew their membership the following year?
I'm a great believer in Trade Associations (they aren't all good) most serve their members well and achieve far more for the individual than he could possibly do for himself.
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Old 2nd Jan 2014, 20:59
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Aarch, stupid iPhone app, here goes again.

As said, join RPG Italian tax group. Then read doible taxation treaties between IRL-Italy, ITL-your home country and italy-home country.
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Old 3rd Jan 2014, 14:15
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The rules have changed little. What has changed is contactors' realisation that they have been totally misled by their agencies and technical employers and the various EU tax men cracking down on the flagrant breaches. Social contributions/insurances have always been payable where you spend most of your time, which is usually where you work, ie the country in which you are based, and income tax is payable in the country in which you are based. Paying Irish taxes has never been legitimate unless based there. Previous research would have revealed this...

Thankfully, under the EU double taxation agreement, you won't be charged in two countries for the same bill - ie., the UK won't charge you for either NIC or income tax if based elsewhere, even if you have property in the UK and even if you live here on days off or the family are still here. What does get messy is if you work outside of the EU and have family or available dwellings within - then you will often be liable for charges in that EU country as well as wherever you are working (something to be considered when you look exitedly at the tax-free contracts in the ME or China).
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Old 4th Jan 2014, 14:35
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Why not put some of this energy into establishing if you are indeed NOT an employee. If you are one then the tax situation is easy AND you'd get more benefits and no stress. Perhaps your focus is not on the correct target.
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Old 4th Jan 2014, 16:43
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It would be very interesting to know if anyone from Brookfield or Ryanair have given some advice regarding this mess to the affected guys?
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