Tax treatment is rarely the reason to buy a private jet, but it is often the difference between a good acquisition and an expensive one. Three frameworks dominate the planning conversation in 2026 — US bonus depreciation, US Section 179, and EU VAT recovery. None of them is a substitute for qualified counsel, but every serious buyer should understand the shape of each before going to LOI.
US bonus depreciation in 2026
Bonus depreciation lets a qualifying buyer write off a large percentage of the aircraft's cost in year one rather than spreading it across the depreciation schedule. The percentage has stepped down each year since the 2017 peak of 100%:
- 2023: 80%
- 2024: 60%
- 2025: 40%
- 2026: 20%
- 2027 onward: 0% under current law
This is the relevant number for any buyer closing in calendar 2026. The remaining 80% of the cost depreciates under the standard MACRS schedule (typically 5-year for aircraft used predominantly in business).
Section 179
Section 179 allows immediate expensing of qualifying property up to an annual cap ($1.22M for 2026, phased out above $3.05M of total qualifying purchases). The cap and phase-out make Section 179 largely irrelevant for whole-aircraft acquisitions in the price bands we work in — but it can apply to certain interior refurbishments, avionics upgrades, and ground equipment.
The business-use threshold
Both bonus and standard depreciation require predominant business use — defined as more than 50% of flight hours flown for documented business purposes. Aircraft falling below 50% lose the accelerated schedule and depreciate under the alternative MACRS straight-line method, which is materially less favorable.
Documentation matters. Owners who fail audits typically lose because their flight logs do not substantiate the business-use percentage claimed. A clean SIFL log, contemporaneous trip purpose documentation, and a defensible cost allocation methodology are non-negotiable.
EU VAT recovery
The EU VAT story is fundamentally different. Aircraft acquired by a qualifying business entity in an EU member state can often recover VAT (up to 25% depending on jurisdiction) on the acquisition, provided the aircraft is used for taxable economic activity.
The two routes most commonly used in 2026:
- Free Circulation via a permissive registry (Isle of Man, Malta, Denmark) — the aircraft is imported, VAT is paid then recovered, and the aircraft moves freely within the EU.
- Temporary Admission (TA) for non-EU residents flying into the EU — no VAT due, but use restrictions apply and the rules tightened materially after 2020.
VAT planning must happen before closing, not after. Buyers who close first and try to restructure later face challenges that rarely yield a clean recovery.
What none of this changes
Tax treatment can shift the net cost of an aircraft by several million dollars over a 10-year hold. It does not change the underlying operating cost, the depreciation curve, or the choice of airframe. The aircraft that fits the mission is the aircraft to buy. The structure is engineered around it — not the other way around.
For the full cost picture before tax treatment, see private jet ownership cost. For the buying process, see how to buy a private jet. This article is general information, not tax advice — every buyer should engage qualified counsel before closing.