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Volkswagen earns flak over its tax-tricking fleet of private jets

The company’s business is not just about automobiles

If you didn't know, Volkswagen AG has a wholly owned chartered jet service. IMAGE FROM VOLKSWAGEN

Volkswagen might be best known for building cars, but the company is also active in the aviation sector where it operates its own fleet of private jets. Known as Volkswagen AirService, it has a total of eight private planes: two Dassault Falcon 8X, four Dassault Falcon 7X, and two Pilatus PC-24. These are not only flying company bigwigs around the globe, but can also be chartered by others.

This setup means the carmaker saves millions of euros in tax every year, a fact that has just earned it a good dose of criticism in the German media.

Operating your own company airline might sound pretty extravagant, but according to Volkswagen, it’s a necessity as not all of the firm’s 118 global locations are near international airports.

VW AirService Pilatus PC-24. PHOTO FROM PILATUS

Last year, company jets completed around 2,800 flights (or around eight per day), with two-thirds of them ferrying VW employees around the globe. The remaining third was filled by private charters, where anyone with enough dosh in the bank can pick up the phone and hire a VW jet for between €2,000 and €15,000 (P120,000 to P900,000) per flying hour.

In total, the VW AirService burned over 8,000,000L of kerosene last year while flying to destinations that included the Bahamas, Mallorca, and the Maldives.

If Volkswagen would operate this fleet purely as a private and internal resource, it would be required to pay tax on all that fuel under the German Energy Tax Act. But because VW runs this fleetwhich, by the way, has the call sign Beetle”—as a commercial charter outfit, it is exempt from this particular fuel duty.

That’s great news for Volkswagen, but not so good news for the German government that is said to be losing millions of euros in tax through this totally legal way of doing things. German newspaper Süddeutsche Zeitung and TV station NDR conducted a joint investigation that not only uncovered this fact, but also found out that VW is avoiding another expense through this structure.


In addition to being exempt from the energy tax on fuel, VW also doesn’t have to buy pollution rights for its jets as part of European emissions trading. This saves the firm hundreds of thousands of euros a year.

Commercial aviation companies only have to pay for the emissions they cause within Europe from 10,000 tons of carbon dioxide per year. For companies that use their jets entirely themselves, the value stands much lower at 1,000 tons. Volkswagen AirService has reported just over 8,000 tons for 2022, meaning it doesn’t have to pay anything under these rules.

Not everyone is amused about this setup, even if there’s nothing untoward about it where the law is concerned. At least one member of the German tax justice network is on record as saying that all tax incentives for private aviation should be scrapped, but that the VW case is especially sensitive as the company is partly owned by the German government.

The latter told reporters that it won’t comment on the investigation, citing legal reasons. Maybe the prime minister of Lower Saxony, the German state where Volkswagen is headquartered, knows more. He’s on the supervisory board of VW, and used company jets at least six times. Five of those flights were to the Austrian city of Salzburg, where a number of Piëch and Porsche family members live.

Even Porsche has its own chartered jet service, except it's a whole lot more private. PHOTOS FROM PORSCHE AIRSERVICE

Volkswagen itself sees no problem in the company structure, and points to numerous other large companies that have outsourced their flight service or use charter companies. At least, VW is allowing its corporate fleet to be tracked and is releasing some information.

The even more discreet Porsche Air Service operates under the same kind of setup, but even goes as far as blocking its two airplanes from being tracked by popular flight-tracking apps. It also won’t say what destinations the jets are flying to, but thanks to some private airplane trackers and plane spotters, we know that frequent flights to Mallorca in Spain and the luxury resort island of Sylt in Germany took place from its base in Salzburg. No prizes for guessing who the tax-saving passengers may have been.

Frank Schuengel

Frank is a German e-commerce executive who loves his wife, a Filipina, so much he decided to base himself in Manila. He has interesting thoughts on Philippine motoring. He writes the aptly named ‘Frankly’ column.