Austria: bonus miles earned through business trips are subject to income tax

In a recently published judgement, Austrian Admnistrative Court (VwGH) decided that bonus miles of a frequent flyer programme earned by an employee on business trips are a taxable benefit arising from the employer-employee relationship, if used for the employee's private purposes: even if only individual persons are eligable to participate in frequent flyer programmes while companies are excluded, miles earned on business trips are occasioned in the context of the employer-employee relationship and therefore constitute income from employment if used privately.

However, these benefits do neither constitute any wage tax liabilities of the employer nor any obligation of the employer to monitor the use of bonus miles.

Income tax therefore must be paid by the employee himself as soon as the bonus miles are redeemed for goods or services. The mere credit of miles doesn't create any tax obligation.

Judgment 2007/15/0293 of April 29, 2010 available in German here>>.

Evaluation of Regulation 261/2004/EC

The final report (110 pages) as of February 2010 made by Steer Davies Gleave / London for the European Commission DG Transport can be found and downloaded here:

Report

German BGH: Airline bonus points

Germany Highest Court (BGH) ruled yesterday about the forfeiture of Airline bonus points (BGH 28.01.2010, Xa ZR 37/09):

Plaintiff was a participant of the flight awards program of the defendant airline. Under this program, travelers were able to collect a number of bonus points dependent on the route booked that could be redeemed within five years after the flight for bonus tickets. In the conditions of the program (CoP), the defendant retained the right to terminate the program at any time. In September 2007 defendant announced the ending of the rewards program by 31 October 2007 and admitted to the participants the option to transfer the points collected to another airline’s program. At the same time defendant terminated plaintiff’s participation contract and informed the plaintiff that he may book flights on the bases of the current CoP until 30 April 2008 only and which shall take place until 31 October 2008.

Plaintiff considered that defendant’s CoP shall be null and void in this regard and he claimed that he could still redeem the bonus points within five years after the flight date.

Both, the district court and the court of appeal dismissed the action and considered the CoP of the defendant still to be in force and binding.

The BGH did not follow this point of view. Defendant may terminate the flight rewards program at any time, however, in the case at hand the CoP providing a right to decrease the period of the initial validity of the bonus points of up to one tenth can not be justified.

This may cause difficulties for the defendant when booking appropriate bonus flights only six months in advance. Bonus points are a not a voluntary service provided by the defendant, since the bonus points are a kind of discount agreed which is applicable for future flights. The defendant is obliged to grant bonus points for flights that have taken place after termination the program, unless they have been booked prior to its termination on the basis of the CoP.

The offered transfer to another airline’s awards program is not an alternative, because it is not equivalent in every respect.

Prohibited items lists EU+USA

USA

1a.

You can find the list of prohibited items published by the TSA which applies to flights originating within the USA (3/2009):

List USA

1b.

The TSA also provides rules for liquids, the so called '3-1-1 for Carry-Ons':

3-1-1 Carry-Ons

EU

2a.

Code word: "Hermeticism"

• In the EU originally Regulation 2320/2002/EC on common rules in the field of civil aviation security as amended by Regulation 849/2004/EC (subject: All EU airports, service providers, catering, cleaning and cargo parties as well as all airlines both EU and foreign departing or transiting any EUairport) provided a secret (!!!) list of prohibited items, which the ECJ decided in Case (GC) C-345/06 (Heinrich) has to be published due to Regulation 1049/2001/EC regarding public access.
• A new Regulation as of 11.03.2008 repealing the former one has been issued but is not applicable yet: Regulation 300/2009/EC
• A new list of prohibited items based on Art 4 Para 2 Regulation 2320/2002/EC has been published by Regulation 820/2008/EC as amended by Regulation 483/2009/EC: Current and consolidated version of Regulation 820/2008/EC as of 30.06.2009

2b.

The well known rules regarding liquids as of 2006 can be found here:

Security rules

2c.

Initial plans to set legal limits at European level to the size of carry-on cabin baggage in airplanes have been withdrawn; likewise plans of the Commission to an end of the ban of liquids.

China: restrictions for business travelers

Government officials confirmed Thursday that visas for business people will be tougher to get during the Olympic period. Authorities have repeatedly said the security measures are needed because the games are a target for terrorism.

Now, Beijing and other Olympic cities such as Shanghai have stopped issuing official invitation letters, known as notification letters, needed for business visas until late September, unless it involves employment or executing business contracts, an official with the Beijing Municipal Bureau of Commerce said.

"We don't take in applications related to any other general business matters, such as attending conferences, visiting factories and business negotiations. Such applications will not be handled until after Sept. 20," Chen Yu said.

Source: International Herald Tribune; full article here>>.