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
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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.
|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)|
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 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 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)|
|Are EU resident persons with a non-EU passport allowed on-board?||Crew||YES||YES (8)|
|Are non-EU resident persons with an EU passport allowed on-board?||Crew||YES||YES|
|Are non-EU resident persons with a non-EU passport allowed on-board?||Crew||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)|
|Guernsey (2)||OK||NOT possible (9)|
|Isle of man (M)||OK||NOT possible (9)|
|San Marino (T7)||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 to one EU destination||Unlimited||Unlimited|
|Flying internally in the EU||Unlimited||Unlimited|
|Period of stay in the EU||Unlimited||Maximum 6 months per entry|
|Multiple flights in and out the EU||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