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COMMERCIAL AND CORPORATE FLYING WITHIN THE EUROPEAN UNION

Quick guide for private and corporate aircraft / Part 91 operators 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 will cover the typical case where an aircraft is owned/operated by a company or legal entity and used for private and corporate purposes.

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 (1) YES, if also operator (2)
Lessee/rentee NO YES, if also operator (2)
Management company NO YES, if also operator (2)
Trust/Trustee NO NO

1. Only the real owner is allowed to reclaim any VAT imposed during the importation. 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?
Local VAT is imposed during the importation but can be reclaimed 100% if aircraft is used for approved VAT-able economic activities 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 required? YES, importer must be registered for VAT NO impact
Is an importation registration required? YES, importer must be registered for importation privileges NO impact
Is it mandatory for the importer to be engaged in economic activity? On importation day YES NO impact
Continuously while operating the aircraft YES, typically for the following 5 years (6) NO impact
Is VAT-able activities mandatory for the importer? (5) On importation day YES NO impact
Continuously while operating the aircraft YES, typically for the next 5 years  (6) NO impact
What is the impact if the aircraft is used for non-VAT-able economic activities? The “non” part of the VAT must be reported and paid back by the importer if the aircraft is not used correctly NO impact
Has non-business use of the aircraft any economic impact on the VAT-handling? Private /personal use YES NO impact
Entertainment use YES NO impact
Spouse/family joining on a business trip YES NO impact
Will private/personal/entertainment use outside the EU impact the EU VAT-handling? YES NO impact
What is the impact if the aircraft is used for non-business activities? The “non” part must be reported and paid back by the importer if not compensated at market rate by non-business users (7) NO impact
Has business use like corporate flying of the aircraft any economic impact of the VAT-handling? NO impact if aircraft is used for approved VAT-able economic activities NO impact

5. Some business activities are not subject to VAT in the EU like selected real estate activities, banking/finance, insurance, gaming and holding companies etc. Importers with these activities are not allowed to reclaim any VAT and any VAT calculated must be considered a cost.
6. The limitation period for VAT and aircraft is on average 5 years but can be extended to 10 years in cases of deliberate abuse.
7. The use of imputed income for personal/entertainment use will NOT eliminate an EU claim for reimbursement of VAT related to non-business use of the aircraft.

Persons on-board Full Importation Temporary Admission
Are EU resident persons with an EU passport allowed on-board? Crew YES YES (8)
Passengers YES YES
Are EU resident persons with a non-EU passport allowed on-board? Crew YES YES (8)
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

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

Registration Full Importation Temporary Admission
Which registration can be used? The 28 EU member states OK NOT possible (9)
Aruba (P4) OK OK
Bermuda (VP-B) OK OK
Cayman (VP-C) OK OK
Guernsey (2) OK NOT possible (9)
Isle of man (M) OK NOT possible (9)
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

9. 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 owner is the same but can in some cases be transferred to a new owner if sold Can be used indefinitely if the regulation is respected
Export Full Importation Temporary Admission
Is exportation needed when aircraft is eventually sold outside the EU or the 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 (1) YES, if also operator (2)
Lessee/rentee NO YES, if also operator (2)
Management company NO YES, if also operator (2)
Trust/Trustee NO NO

1. Only the real owner is allowed to reclaim any VAT imposed during the importation. 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?
Local VAT is imposed during the importation but can be reclaimed 100% if aircraft is used for approved VAT-able economic activities 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 required? YES, importer must be registered for VAT NO impact
Is an importation registration required? YES, importer must be registered for importation privileges NO impact
Is it mandatory for the importer to be engaged in economic activity? On importation day YES NO impact
Continuously while operating the aircraft YES, typically for the following 5 years (6) NO impact
Is VAT-able activities mandatory for the importer? (5) On importation day YES NO impact
Continuously while operating the aircraft YES, typically for the next 5 years  (6) NO impact
What is the impact if the aircraft is used for non-VAT-able economic activities? The “non” part of the VAT must be reported and paid back by the importer if the aircraft is not used correctly NO impact
Has non-business use of the aircraft any economic impact on the VAT-handling? Private /personal use YES NO impact
Entertainment use YES NO impact
Spouse/family joining on a business trip YES NO impact
Will private/personal/entertainment use outside the EU impact the EU VAT-handling? YES NO impact
What is the impact if the aircraft is used for non-business activities? The “non” part must be reported and paid back by the importer if not compensated at market rate by non-business users (7) NO impact
Has business use like corporate flying of the aircraft any economic impact of the VAT-handling? NO impact if aircraft is used for approved VAT-able economic activities NO impact

5. Some business activities are not subject to VAT in the EU like selected real estate activities, banking/finance, insurance, gaming and holding companies etc. Importers with these activities are not allowed to reclaim any VAT and any VAT calculated must be considered a cost.
6. The limitation period for VAT and aircraft is on average 5 years but can be extended to 10 years in cases of deliberate abuse.
7. The use of imputed income for personal/entertainment use will NOT eliminate an EU claim for reimbursement of VAT related to non-business use of the aircraft.

Persons on-board Full Importation Temporary Admission
Are EU resident persons with an EU passport allowed on-board? Crew YES YES (8)
Passengers YES YES
Are EU resident persons with a non-EU passport allowed on-board? Crew YES YES (8)
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

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

Registration Full Importation Temporary Admission
Which registration can be used? The 28 EU member states OK NOT possible (9)
Aruba (P4) OK OK
Bermuda (VP-B) OK OK
Cayman (VP-C) OK OK
Guernsey (2) OK NOT possible (9)
Isle of man (M) OK NOT possible (9)
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

9. 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 owner is the same but can in some cases be transferred to a new owner if sold Can be used indefinitely if the regulation is respected
Export Full Importation Temporary Admission
Is exportation needed when aircraft is eventually sold outside the EU or the operator will no longer operate the aircraft? YES NO

Press the button and see the sensitive points. or