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COMMERCIAL AND CORPORATE FLYING WITHIN THE EUROPEAN UNION

Quick Guide for Private and Corporate Operators
– For Part 91 operators or similar

Compare full importation and Temporary Admission

Updated November 2023

This quick guide covers the typical case where an aircraft is operated by a company and used for private and corporate purposes.

The description is based on the Union Customs Code (UCC) and various EU directives and working papers. In our opinion, this is 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. It grants free circulation for the aircraft, holds a lot of privileges but also potential liabilities, and includes procedures that must be handled continuously and correctly.

Temporary Admission is only for entities established outside the EU. It holds some limitations and preconditions for the owner and operator structure and includes grey zone areas, which can all be handled securely by having the proper documentation.

Important things to know about Temporary Admission
Operators should be aware that different interpretations of the TA procedure exist between member states. Thus, it is important to have a competent customs agency outline the correct use and understanding based on the specific setup. The problem with local interpretations is often related to flights within France, Spain, Portugal, Italy, Greece, and less often other places.

Be prepared to meet the EU customs when using Temporary Admission
Feedback shows that being prepared when flying to the EU is crucial. We recommend that operators are always ready to prove TA compliance and can present relevant documents during a potential customs ramp check. Even though an EU entry can be made paperless. No operator should fly to the EU unprepared and unable to explain and document why they are eligible to use the TA procedure. Being ready for a customs ramp check should be seen parallel to how an operator prepares for an eventual SAFA ramp check. We acknowledge that it might be difficult for operators to prepare a convincing portfolio of documentation proving TA compliance. However, having this ready for customs ramp checks protects operators against the large financial risk as well as hours or days of delay at the ramp while their case is perused. We have helped hundreds of clients prepare for ramp checks with different STA solutions pending on the risk profile. A ready-to-use portfolio of relevant documents is simply operators’ only security, easing customs ramp checks and giving all involved entities peace of mind. We experience that many pilots are not trained and prepared to handle the above issues convincingly.

Important things to know about full importation
Operators should be aware that full importation includes a potential VAT and tax liability, requires onwards continuous correct worldwide economic activity as well as correct handling of any potential worldwide non-business use and or non-commercial use; requirements that the TA procedure does not have. The statute of limitations is five years for full importation, and the use of the aircraft must worldwide stay fully compliant with current EU regulations until the end of this period.

Wrap up
Non-EU operators capable of using the TA procedure will have vast advantages. These operators will practically have the same flying privileges as given under full importation, as the few limitations do not influence the typical flight for EU outsiders. Here, TA will even give the declarant more flexibility and extra advantages such as unrestricted personal, family or guest use without consequences, and no tax or VAT liability anywhere. Many of which are often a huge problem when using full importation.

How can we help?
If you have questions about the above, please do not hesitate to contact us.

 Red  = Low flexibility or liability  Yellow  = Be aware  Green  = High flexibility

Entities involved Full Importation Temporary Admission
Which entity can be the importing entity / declarant? Owner Yes (1) Yes, if also operator (2)
Lessee/renter No (3) Yes, if also operator (2)
Management company No YES, if also operator (2)
Trust/Trustee No No
  1. Only the real economic owner (the purchaser) is allowed to deduct any VAT imposed during the importation.
  2. The operator is, in customs terms, the entity that has supervision or control of the aeronautical operation, typically employs crew, and provides services to keep the aircraft flying.
  3. Some EU member states allow a lessee to be the importing entity and to deduct any VAT imposed during the importation.
Methods used for VAT and Customs duty Full Importation Temporary Admission
How is the VAT handled?
The VAT ranges from 17-27% depending on the EU member state and is based on the value of the aircraft
Local VAT is imposed during the importation, but the VAT can be deducted 100% if aircraft is used 100% for approved economic activities No VAT is imposed
How is the customs duty handled?
The customs duty is 2.7% and based on the value of the aircraft
No customs duty is imposed No customs duty is imposed
Preconditions & usage Full Importation Temporary Admission
Is an EU establishment required for the importing entity/declarant? No Declarant cannot be established within the EU
Is EU ownership required? No Owner entity (including UBO) cannot be established within the EU
Can the operator be EU-established? Yes No
Is it mandatory for the importing entity / declarant to be engaged in economic activity? On importation day Yes No impact
Continuously while operating the aircraft Yes, typically for the following five years (4) No impact
Must the aircraft be used for approved economic activities by the importing entity/declarant? (5) On importation day Yes No impact
Continuously while operating the aircraft Yes, typically for the following five years (4) No impact
What is the impact if the aircraft is used for non-business activities? The non-business use must be paid back to the VAT authorities No impact
Does this kind of use have any economic impact on the VAT handling? Private or personal use Yes No impact
Entertainment use Yes No impact
Spouse or family joining on a business trip Yes No impact
Will private/personal/entertainment use outside the EU impact the VAT handling? Yes No impact
What is the impact if the aircraft is used for non-business activities, where compensation is paid for the non-business part? This is fine as long as the importing entity is paid compensation at market rate by any non-business users (6) No impact
Does business use, such as corporate flying of the aircraft, have any economic impact on the VAT handling? Yes, but only if the aircraft is used for non-approved economic activities by the importing entity (5) NO impact

4. The limitation period for VAT is on average five years.
5. Some business activities are not subject to VAT in the EU, such as selected real estate activities, banking and finance, insurance, gaming and holding companies, etc. Importing entities with these activities are not allowed to deduct any VAT, and any VAT calculated must be considered a cost.
6. The use of imputed income for non-business use will not eliminate an EU claim for reimbursement of VAT related to non-business use of the aircraft.

Persons onboard allowed Full importation Temporary Admission
EU passengers on internal EU flights Yes Yes (7)
EU crew on internal EU flights Yes Yes (8)
  1. This reply is based on solid EU working papers, but these papers are non-binding for EU member states. The topic can, therefore, be seen as a grey zone area. That is why we mention this reservation and recommend that all operators have proper documentation ready to present during a customs ramp check to secure flights with EU passengers.
  2. There are no restrictions if EU-resident crew are employed by the declarant.
Which aircraft registration can be used? Full Importation Temporary Admission
The 27 EU member states Yes No (9)
Aruba (P4) Yes Yes
Bermuda (VP-B) Yes Yes
Cayman (VP-C) Yes Yes
Guernsey (2) Yes Yes
Isle of Man (M) Yes Yes
San Marino (T7) Yes Yes
Switzerland (HB) Yes Yes
US (N) Yes Yes
Any other registrations Yes Yes
  1. Aircraft registered within the EU are not eligible for Temporary Admission and thus not allowed to be flying in the customs territory of the Union.
Type of flights allowed Full Importation Temporary Admission
Flying to one EU destination Yes Yes
Flying internally within the EU Yes Yes
Maximum period of stay Unlimited Six months per stay (10)
Fixed established EU base Yes No
  1. The aircraft can stay up to six months per stay. Multiple entries are allowed.

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