OFFICE HOURS | CET/CEST 0800-2200 | PLEASE CALL +45 70 20 00 51 info@opmas.dk

BREAKING NEWS: Significant change for EU aircraft importations

April 2016

CONTENTS VOID AFTER NEW YEAR 2017
PLEASE SEE THIS ARTICLE

Dear colleagues

As some will know EU aircraft importations by non-EU based owners or operators have been the basis of an ongoing discussion at EU level for more than 6 months now. The discussion has been centered on end-use exemption.

Background
Aircraft are normally subject to VAT at different rates and subject to 2,7% customs duty. The EU Commission and the Customs Code Committee have discussed several issues severely limiting the possibility of applying for end-use for most non-EU operated or based aircraft.

The discussion within the Committee does not relate to VAT but only to the customs duty.

The EU Customs Code Committee has now released the minutes from their 48th meeting on February 22nd 2016.

Change
The important part of the minutes in relation to aircraft importations is that the EU Commission and the Committee agrees on the following points from a so-called non-paper prepared by one of the EU member states (MS):

  1. The MS stated that an end-use authorisation, whether issued as an authorisation or as a single authorisation via customs declarations, should require the person in whose name the aircraft was declared to be established in the Union.
  2. It was the MS’s view that, before issuing an authorisation for end-use, the customs authorities needed to ensure that the applicant had a factual or legal right to dispose of the aircraft.
  3. The MS said that companies established in the EU should be able to import using the end-use procedure for second-hand aircraft or using the end-use procedure for leased aircraft already registered in a public register.

New interpretation
This latest interpretation of the code introduces a new requirement: the importer (applicant/declarant) must have a factual or legal right to dispose of the aircraft. This requirement is new and does in our assessment not have a direct legal basis under the provision of the EC customs regulation nor the nomenclature. However the outcome of the meeting in the Customs Code Committee and the published minutes hereof effectively means that a representative established in the EU like for example a fiscal representative cannot import an aircraft disposed by a non-EU established owner or operator and legally obtain an end-use exemption for the customs duty.

The Customs Code Committee has stressed that the importer (applicant/declarant) must be established in EU in order to benefit from the end-use regime. As per May 1st at which date the new Union Customs Code is coming into force, the definition of an established legal person will change implying that the legal person has both the necessary human and technical resources permanently present within EU.

As we have mentioned previously the changed practice is applicable EU wide. Completing of importations under the end-use regime after the change without observing the new requirements will imply exposure of a customs claim directed towards both the owner of the aircraft, the operator, the importer of record and the declarant.

It must be stressed that the customs duty collected belongs to the EU – not the individual member state as opposed to the VAT. Thus the risk is that EU will call upon the collection of customs duty in each and every member state.

Consequence
Right now for a non-established owner or operator of an aircraft there is no other option but to wait or to use the Temporary Importation regime available and live with the restrictions and challenges. Likewise for established owners which are not holding the legal or factual right to dispose of the aircraft.

We will continue our discussions with the authorities to clarify exactly how the new criteria can be met and what other options might be available to solve the problems and challenges for the many owners and operators now left in a limbo due to this development. As soon as we have further news we will revert.

In the meantime we sincerely advice every importer of aircraft that are not established within EU and/or does not dispose of the aircraft to obtain a legal opinion from an independent local attorney in any jurisdiction if offered a procedure that seemingly allows you to import your aircraft while benefitting from end-use.

Download
Do not take our word for it. Read for yourself. The entire EU document containing the minutes can be downloaded here, please see point 3 starting on page 5: LINK

Subscribe to our newsletter

Join our mailing list and receive the latest news and updates from the OPMAS team.

If the confirmation email is not received immediately. Please check your SPAM filter.

You have Successfully Subscribed!