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COMMERCIAL AND CORPORATE FLYING WITHIN THE EUROPEAN UNION

Quick guide for international AOC / Part 135 charter certificate holders or similar

Compare full importation against Temporary Admission

Updated November 2017

Covering the VAT and customs handling when using Full Importation or Temporary Admission

The description below assumes that the crew is employed by the AOC / 135 operator. The description will cover the typical case where an aircraft is operated commercially by international AOC / Part 135 charter certificate holders. All traffic is non-scheduled.

The description is based on the EU Customs Code (UCC) and various EU directives and working papers. This is in our opinion the correct interpretation of the regulations but all EU member states have not necessarily implemented everything at present.

Full importation is mainly for EU-established entities and it grants free circulation for the aircraft and come with a lot of privileges but does also come with a lot of potential liability and includes procedures which continuously must be handled correctly. Press the button and see the sensitive points. or

Temporary Admission is only for entities established outside the EU and comes with some limitations and no-gos. Press the button and see the sensitive points. or

Non-EU operators capable of using Temporary Admission will have huge advantages. These operators will practically have the same flying privileges as given under full importation as the few limitations does not influence the typical flight and many of the below points will give the declarant more flexibility and extra advantages like unrestricted personal/family/guest use without consequences and no tax/VAT liability anywhere, many of these points are often a huge problem and burden when using full importation.

Contact us first regarding your situation – we will advise you on the most appropriate solution.

Entities involved Full Importation Temporary Admission
Which entity can be the importer? Owner YES, via look- through (1) NO
Lessee/rentee YES, via look- through (1) NO
Trust/Trustee NO NO
Operator YES YES (2)

1. The VAT exemption can be extended to owner, lessee/rentee, Please read more
2. The operator is in general the entity which have the crew employed and provides services to keep the aircraft flying.

Methods used for VAT and Customs duty Full Importation Temporary Admission
How is the VAT handled?
The VAT is ranging from 15-27% depending on the EU member state and is based on the value of the aircraft
No VAT is imposed if both operator and aircraft qualifies for exemption No VAT is imposed
How is the Customs duty handled?
The Customs duty is 2.7% and is based on the value of the aircraft
No Customs duty is imposed if importer is fully established in the EU (3) (4) No Customs duty is imposed

3. As per May 2016 to end 2017, a legal person is established in the EU only when having its registered office, central headquarters or a permanent business in the EU, where both the necessary human and technical resources are permanently present. Thus, local representation cannot be organized by proxy. EU establishment does typically create a local tax liability as an entity cannot be established without any real local activity. Please read more
4. As per January 1st 2018, 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. Please read more

Preconditions & usage Full Importation Temporary Admission
Is full EU establishment/residency required for importer? NO, Importer must no longer be fully established in the EU (3) (4) Importer cannot be EU established/resident in any way
Is full EU ownership required? NO Owner/beneficial owner cannot be EU resident in any way
Is a VAT registration needed? NO – not relevant as International charter traffic is in general VAT exempt. Reclaiming VAT is not possible. NO impact
Is an importation registration needed? YES, importer must be registered for importation privileges NO impact
Is it possible to be VAT exempt? YES, if both operator and aircraft qualifies NO impact
If VAT exemption is not possible, can any VAT imposed during the importation be reclaimed? NO, International charter is VAT exempt. NO impact
What are the preconditions for the importer to be considered an international airline with VAT exemption? The majority of all traffic for importer must be internationally (5) NO impact
What are the preconditions for an aircraft to be considered VAT exempt if used by an exempt international airline? Meant to be used exclusively for charter (6) NO impact
Is it mandatory for the operator to be engaged in economic activity? On importation day YES YES
Continuously while operating the aircraft YES YES
Is charter use mandatory for the operator? On importation day YES NO impact
Continuously while operating the aircraft YES NO impact
What is the impact if the aircraft is actually used for non- charter activities by the operator? Renewed VAT assessment. No longer exempt (7) NO impact
If used for charter, has non-business use of the aircraft by passengers any economic impact of the VAT-handling? Private /personal use NO impact NO impact
Entertainment use NO impact NO impact
Does non-EU use impact the VAT-handling NO impact NO impact
If used for charter, has business use by passengers like corporate flying of the aircraft any economic impact of the VAT-handling? NO impact NO impact

5. The importer must normally have a majority of international flights, the Danish threshold is 55%+. The threshold can vary from EU member states to another.
6. The Danish threshold is 100% charter. The threshold can vary from one EU member state to another.
7. If the use of the aircraft is changed the VAT will have to be reassessed.

Traffic rights, charters, tickets etc Full Importation Temporary Admission
Are traffic “freedom” rights needed when flying on internal legs in the EU? YES, always if importer is non-EU YES, always
Are group charters allowed on internal legs in the EU? YES YES
Is it allowed to use aircraft for transportation against a ticket fee in the EU? YES/NO (8) NO

8. Ticket sales requires scheduled traffic rights which very few non-EU AOC / 135 operators will have.

Persons on-board Full Importation Temporary Admission
Are EU resident persons with an EU passport allowed on-board? Crew YES YES (9)
Passengers YES YES
Are EU resident persons with a non-EU passport allowed on-board? Crew YES YES (9)
Passengers YES YES
Are non-EU resident persons with an EU passport allowed on-board? Crew YES YES
Passengers YES YES
Are non-EU resident persons with a non-EU passport allowed on-board? Crew YES YES
Passengers YES YES

9. There are no restrictions if EU-resident crew is employed by the importer.

Registration Full Importation Temporary Admission
Which registration can be used?

The listings do not indicate whether or not the mentioned registrations can be used for charter on a specific charter certificate.

The 28 EU member states OK NOT possible (10)
Aruba (P4) OK OK
Bermuda (VP-B) OK OK
Cayman (VP-C) OK OK
Guernsey (2) OK NOT possible (10)
Isle of Man (M) OK NOT possible (10)
San Marino (T7) OK OK
Switzerland (HB) OK OK
USA (N) OK OK
Any other registration OK OK
Can the registered owner mentioned on the Certificate of Registration (CoR) be an EU resident? YES NO

10. The Isle of Man and Guernsey are still part of the EU customs area and for that reason aircraft registered there are considered registered inside the EU even though these areas are not a part of the EU. Aircraft registered in the EU are not eligible for Temporary Admission and thus not allowed to be flying in the EU customs area – not even a single entry in and out of the EU without a full importation. All aircraft using these aircraft registrations must be fully imported at the first port of call in the EU if not already imported. Please read more

EU stay Full Importation Temporary Admission
What about flying/staying in the EU? Flying in and out Unlimited Unlimited
Internal EU flights Unlimited Unlimited
Stay in the EU Unlimited Maximum 6 months per entry
Multiple entries Unlimited Unlimited
Homebase or long-term hangarage Unlimited NOT possible

 

Validity Full Importation Temporary Admission
What is the validity of the customs documents for the importation? Unlimited as long as the operator is the same Can be used indefinitely if the regulation is respected

 

Export Full Importation Temporary Admission
Is exportation needed when the aircraft is eventually sold outside the EU or operator will no longer operate the aircraft? YES NO

Press the button and see the sensitive points. or

Entities involved Full Importation Temporary Admission
Which entity can be the importer? Owner YES, via look- through (1) NO
Lessee/rentee YES, via look- through (1) NO
Trust/Trustee NO NO
Operator YES YES (2)

1. The VAT exemption can be extended to owner, lessee/rentee, Please read more
2. The operator is in general the entity which have the crew employed and provides services to keep the aircraft flying.

Methods used for VAT and Customs duty Full Importation Temporary Admission
How is the VAT handled?
The VAT is ranging from 15-27% depending on the EU member state and is based on the value of the aircraft
No VAT is imposed if both operator and aircraft qualifies for exemption No VAT is imposed
How is the Customs duty handled?
The Customs duty is 2.7% and is based on the value of the aircraft
No Customs duty is imposed if importer is fully established in the EU (3) (4) No Customs duty is imposed

3. As per May 2016 to end 2017, a legal person is established in the EU only when having its registered office, central headquarters or a permanent business in the EU, where both the necessary human and technical resources are permanently present. Thus, local representation cannot be organized by proxy. EU establishment does typically create a local tax liability as an entity cannot be established without any real local activity. Please read more
4. As per January 1st 2018, 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. Please read more

Preconditions & usage Full Importation Temporary Admission
Is full EU establishment/residency required for importer? NO, Importer must no longer be fully established in the EU (3) (4) Importer cannot be EU established/resident in any way
Is full EU ownership required? NO Owner/beneficial owner cannot be EU resident in any way
Is a VAT registration needed? NO – not relevant as International charter traffic is in general VAT exempt. Reclaiming VAT is not possible. NO impact
Is an importation registration needed? YES, importer must be registered for importation privileges NO impact
Is it possible to be VAT exempt? YES, if both operator and aircraft qualifies NO impact
If VAT exemption is not possible, can any VAT imposed during the importation be reclaimed? NO, International charter is VAT exempt. NO impact
What are the preconditions for the importer to be considered an international airline with VAT exemption? The majority of all traffic for importer must be internationally (5) NO impact
What are the preconditions for an aircraft to be considered VAT exempt if used by an exempt international airline? Meant to be used exclusively for charter (6) NO impact
Is it mandatory for the operator to be engaged in economic activity? On importation day YES YES
Continuously while operating the aircraft YES YES
Is charter use mandatory for the operator? On importation day YES NO impact
Continuously while operating the aircraft YES NO impact
What is the impact if the aircraft is actually used for non- charter activities by the operator? Renewed VAT assessment. No longer exempt (7) NO impact
If used for charter, has non-business use of the aircraft by passengers any economic impact of the VAT-handling? Private /personal use NO impact NO impact
Entertainment use NO impact NO impact
Does non-EU use impact the VAT-handling NO impact NO impact
If used for charter, has business use by passengers like corporate flying of the aircraft any economic impact of the VAT-handling? NO impact NO impact

5. The importer must normally have a majority of international flights, the Danish threshold is 55%+. The threshold can vary from EU member states to another.
6. The Danish threshold is 100% charter. The threshold can vary from one EU member state to another.
7. If the use of the aircraft is changed the VAT will have to be reassessed.

Traffic rights, charters, tickets etc Full Importation Temporary Admission
Are traffic “freedom” rights needed when flying on internal legs in the EU? YES, always if importer is non-EU YES, always
Are group charters allowed on internal legs in the EU? YES YES
Is it allowed to use aircraft for transportation against a ticket fee in the EU? YES/NO (8) NO

8. Ticket sales requires scheduled traffic rights which very few non-EU AOC / 135 operators will have.

Persons on-board Full Importation Temporary Admission
Are EU resident persons with an EU passport allowed on-board? Crew YES YES (9)
Passengers YES YES
Are EU resident persons with a non-EU passport allowed on-board? Crew YES YES (9)
Passengers YES YES
Are non-EU resident persons with an EU passport allowed on-board? Crew YES YES
Passengers YES YES
Are non-EU resident persons with a non-EU passport allowed on-board? Crew YES YES
Passengers YES YES

9. There are no restrictions if EU-resident crew is employed by the importer.

Registration Full Importation Temporary Admission
Which registration can be used?

The listings do not indicate whether or not the mentioned registrations can be used for charter on a specific charter certificate.

The 28 EU member states OK NOT possible (10)
Aruba (P4) OK OK
Bermuda (VP-B) OK OK
Cayman (VP-C) OK OK
Guernsey (2) OK NOT possible (10)
Isle of Man (M) OK NOT possible (10)
San Marino (T7) OK OK
Switzerland (HB) OK OK
USA (N) OK OK
Any other registration OK OK
Can the registered owner mentioned on the Certificate of Registration (CoR) be an EU resident? YES NO

10. The Isle of Man and Guernsey are still part of the EU customs area and for that reason aircraft registered there are considered registered inside the EU even though these areas are not a part of the EU. Aircraft registered in the EU are not eligible for Temporary Admission and thus not allowed to be flying in the EU customs area – not even a single entry in and out of the EU without a full importation. All aircraft using these aircraft registrations must be fully imported at the first port of call in the EU if not already imported. Please read more

EU stay Full Importation Temporary Admission
What about flying/staying in the EU? Flying in and out Unlimited Unlimited
Internal EU flights Unlimited Unlimited
Stay in the EU Unlimited Maximum 6 months per entry
Multiple entries Unlimited Unlimited
Homebase or long-term hangarage Unlimited NOT possible

 

Validity Full Importation Temporary Admission
What is the validity of the customs documents for the importation? Unlimited as long as the operator is the same Can be used indefinitely if the regulation is respected

 

Export Full Importation Temporary Admission
Is exportation needed when the aircraft is eventually sold outside the EU or operator will no longer operate the aircraft? YES NO

Press the button and see the sensitive points. or