BREAKING NEWS: Significant change for EU aircraft importations and the EU customs duty
An importer has to clear two different sorts of “taxes” when fully importing an aircraft into the EU – the customs duty (typically 2,7% for business jets) and the VAT (ranging between 17-27%). Both rates are calculated based on the value of the aircraft. The present preconditions for clearing the customs duty via an end-use arrangement is that the importing entity must be fully established in the EU and have actual and legal right to dispose of the aircraft. These preconditions have apparently been too difficult to administrate, and the EU is now changing the regulation for the customs duty part as described below. The change will be in force per January 2018.
The 2018 change
A civil aircraft can be imported for free circulation with relief from customs duties if the aircraft has been duly entered on a register of a Member State or a third country in accordance with the Convention on International Civil Aviation dated 7. December 1944 (ICAO). Importation with customs relief pr. 1 January 2018 is no longer conditioned upon applying for end-use procedure. Importation of civil aircraft can be made under customs relief by reference to the valid certificate of registration in the customs declaration for release for free circulation. Please note that the presence of the relevant certificate on board of each aircraft is mandatory.
See the EU implementing regulation here.
Always ask first
Our advice has always been to ask the local tax authorities for a binding advance tax ruling prior to any importation/admission in order to eliminate any doubt about the outcome. All cases are different in the details, and a binding advance tax ruling will also take into account all new European Court of Justice judgements! Even if you think you have a fully working set-up, it is too risky to go through with the importation/ admission without a binding advance tax ruling from the EU member state into which the aircraft is to be imported.
This update relates only to a full importation into the EU where the aircraft is exempt as being used for commercial flights with an AOC/Charter certificate or where the aircraft is used 100% for business purposes and the import VAT has been reclaimed. It does not apply to Temporary Admission.