Jets and ‘jouissance’ rights?
Commercial Jet Leasing Company
Our client wanted to acquire a jet and lease it commercially in Latin America, repatriating the profits in their LATAM jurisdiction. They asked us to help structure the transaction efficiently.
- Our proposed structure required the owner of the aircraft to contribute the aircraft to an EU incorporated company in return for a jouissance right for up to 95% of the profit.
- While leasing income was liable to 25% corporate income tax in the EU jurisdiction, the jouissance right (structured as a debt instrument) allowed the interest payable to be tax deductible leaving a nominal amount subject to tax.
- Our client’s interest was not taxable on repatriation under the relevant double tax agreement.