- Determining the tax treatment of personnel employed on aircraft operating in international traffic, including pilots, captains and cabin crew, requires a combined analysis of Italian tax legislation and international double taxation treaties.
As a general rule, most international tax treaties, based on Article 15(3) of the OECD Model Tax Convention, provide that salaries earned by flight crew working on aircraft in international traffic are taxable in the state where the airline's place of effective management is located. In many cases, however, taxation is not exclusive to that state, but may also apply in the employee's country of residence.
However, where no tax treaty applies, or where specific rules govern employment performed in Italy, taxation may depend on the actual flight time spent in Italian airspace.
This guide examines the main criteria for determining where airline employees are required to pay tax.What Is “International Traffic” and How Is the Place of Effective Management Determined?
In the aviation sector, correctly classifying the flight route and identifying the company's place of effective management are the starting points for determining the applicable tax regime.
International traffic: This generally refers to any transport activity carried out by an aircraft operated by an enterprise whose place of effective management is located in a contracting state, excluding flights operated exclusively between locations in the other state, i.e. purely domestic flights.
Place of effective management: This is the place where the key management and commercial decisions of an enterprise are made, or where the main and substantive part of its business activities is carried out.
Important note: Italy applies a rigorous interpretation of the concept of effective management, considering not only the registered office or the location of the board of directors, but also where the entity's principal activities are actually carried out.International Tax Treaty Rules: Article 15 of the OECD Model Convention
To prevent employees from being taxed twice, both in their country of residence and in the country where the airline is managed, international tax treaties based on the OECD Model Tax Convention may apply.
Article 15(3) – International Traffic: This provision establishes that remuneration for employment exercised aboard aircraft operated in international traffic is taxable in the state where the enterprise's place of effective management is located. In certain cases, this taxation is exclusive, as provided for under the Italy–United Arab Emirates tax treaty.
Article 15(1) and (2) – General Rule: If the enterprise's place of effective management is located in a third state outside the scope of the relevant treaty provision, the general rules apply. These generally concern taxation in the employee's country of residence or in the state where the employment is exercised, subject to the applicable conditions, including the 183-day threshold where relevant.Italian Domestic Tax Law and the Calculation of Time Spent in Airspace (Ruling No. 15/2025)
Where no double taxation treaty applies, reference must be made to the Italian Consolidated Income Tax Act (Testo Unico delle Imposte sui Redditi, or TUIR).
Under Article 23(1)(c) of the TUIR, income relating to employment activities performed within Italian territory is considered Italian-source income for employees of foreign airlines or those operating on routes involving multiple jurisdictions.
As clarified by the Italian Revenue Agency in Ruling No. 15/2025:Domestic vs. International Flights: A Practical Example
A pilot who is tax-resident abroad, works for a foreign airline and operates an international flight departing from Rome Fiumicino, spending 45 minutes in Italian airspace out of a total flight time of eight hours, would, under Italian domestic tax rules, have only the portion of remuneration attributable to those 45 minutes subject to Italian IRPEF.Specific Territorial Considerations and Bilateral Agreements (e.g. the Middle East)
The taxation of flight crew also depends on the specific provisions included in individual bilateral tax treaties signed by Italy.
United Arab Emirates: The treaty provides for exclusive taxation in the state where the air transport enterprise's place of effective management is located. Its provisions also extend to reassigned employees performing activities in the other state.
Qatar, Saudi Arabia and Oman: These treaties contain specific wording and provide for concurrent taxation or exceptions subject to conditions, including compliance with the 183-day threshold for physical presence in the other state.
For the purposes of calculating the 183-day period, the internationally recognised criterion reflected in the OECD Commentary is physical presence. This includes days of arrival and departure, public holidays and holidays spent in the country.Frequently Asked Questions (FAQs)
1. If I am a pilot or flight attendant residing in Italy, must I declare my foreign salary?
Yes. As an individual who is tax-resident in Italy, you are subject to the principle of worldwide taxation. However, it is necessary to check whether the tax treaty between Italy and the airline's country of management provides for exclusive taxation abroad. A tax credit may be available for final taxes paid abroad, subject to the applicable conditions.2. How is the 183-day presence test calculated for flight crew?
The calculation generally takes into account days of physical presence within the territory of the relevant state during the tax year, including days of arrival and departure, public holidays and holidays. Days spent purely in transit between two points outside the state are not counted.3. Does the “airspace” rule always apply?
No. The allocation of income according to the hours spent in Italian airspace, as described in Ruling No. 15/2025, applies when Italian domestic tax legislation alone is relevant under Article 23 of the TUIR. Where a bilateral tax treaty applies, its provisions take precedence to the extent provided for under the treaty.Need Tax Advice for Flight Crew?
The taxation of pilots, captains and cabin crew operating international routes requires a careful assessment of tax residence, employment contracts and the applicable international tax treaties.
If you need assistance in reviewing your tax position or managing your income tax returns, contact Studio Barbara Antonini to request qualified, personalised tax advice. - Domestic flights, from one Italian city to another, are fully taxable in Italy.
- International flights: The portion of income taxable in Italy is determined by allocating the employee's salary according to the hours of work actually performed in Italian airspace during the relevant tax year. For non-residents, the portion of salary corresponding to flight hours spent outside Italian territory and airspace is not subject to Italian taxation under Article 23 of the TUIR, as the employment is not performed within Italian territory.
Back to blog
Tax·October 20, 2026·5 min read
Taxation of International Flight Crew: How It Works and Where Taxes Are Paid
The taxation of flight crew engaged in international air traffic is subject to specific rules designed to prevent double taxation between countries. To avoid double taxation, the criteria set out in international tax treaties and the OECD Model Tax Convention must be applied.
by Barbara Antonini
No liability can be attributed for the use of the information contained in this blog.
Latest articles
Blog & News
Looking for a reliable accountant?
Let's talk, no strings attached.
A first conversation to understand your situation, assess your needs and explore how we can help.