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19 October 2010

Ryanair Hits Back In French Tax Dispute

Budget airline Ryanair has announced that it is to decamp its Marseilles Airport operations from January 11, 2011, following a dispute over the payment of French income taxes by its cabin crew and pilots.

Announcing its decision, the airline denounced the initiation of legal proceedings by the French government, which centers on crew members’ liability to French taxes when operating to and from Marseilles.

Ryanair said that due to the aircraft being Irish, and thus, it claims, being Irish territory, crew members should pay Irish tax and social insurance contributions as they receive their remuneration in Ireland.

Four Marseilles based aircraft (and 200 Ryanair jobs) will now be moved in January to competitor airports in Spain, Italy and Lithuania, Ryanair announced. 10 of its 23 routes will continue to fly to and from Marseille airport, the airline confirmed, but these crew will be based other than in Ireland.

Ryanair has claimed that France's argument contravenes provisions of the European Directive on International Transport Workers. “We are to take our case to the European Courts against this French decree, which clearly runs counter to EU rules on international transport workers,” Ryanair said.

France claims that the airline hired residents of Marseilles under Irish agreements to avoid paying payroll tax on their employment.

Speaking on October 13 in Marseilles, Ryanair’s Chief Executive, Michael O’Leary said:

“We are very disappointed at this decision by the French authorities to initiate proceedings against Ryanair’s base in Marseilles, which complies fully with EU regulations for mobile transport workers.”

“These are not French jobs, but rather Irish jobs on Irish aircraft, which are defined by EU regulations as Irish territory. All of these people pay their tax and social insurance, in accordance with EU regulations, in Ireland and they remain fully tax compliant,” O'Leary argued.

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