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Short & Sweet no. 10
How to handle aircraft maintenance correct in a customs context

Added February 2022
  • What about the normal Maintenance, Repair, and Overhauls (MRO) of an aircraft?
  • What about improvements of aircraft?
  • Are there differences between work done inside or outside the EU?
  • Potential problems for EU outsiders with a full EU importation

  • Learn how to avoid the pitfalls
We at OPMAS are frequently asked various questions concerning different aviation-related VAT and customs issues. In this article, we dive a bit deeper into the customs context of correctly handling aircraft maintenance both within and outside the EU.

Aircraft maintenance performed within the EU
EU insiders: always use the normal VAT accounting methods for any work performed.

EU outsiders: non-EU-based operators and owners will have to use a customs procedure called Inward Processing, even though the aircraft is already correctly EU customs import-handled with the use of the TA procedure or a full importation. The use of the Inward Processing procedure is mandatory and must be initiated by the local workshop performing the work on the aircraft immediately after the arrival at the workshop. The use of the Inward Processing procedure allows the workshop not to charge EU VAT on the invoice, so the procedure must be handled the correct way.

Aircraft work performed outside the EU – both EU insiders and outsiders
The handling depends on whether improvements to the aircraft have been made.

Only regular maintenance performed: customs should be handled under the normal Returned Goods Relief rules, typically referred to as the 3-years rule. A customs declaration is considered made by the sole act of crossing the outer EU border if the return flight is less than 3 years after the departure.

An improvement has been made: a customs procedure called the Outward Processing procedure must be activated at a customs office on the way out of the EU flying to the workshop. However, any improvements made outside the EU are not an issue if the improvements are made in one of 32 signatory countries of the WTO Agreement on Trade in Civil Aircraft. If the improvements are not made in one of 32 signatory countries, the Outward Processing procedure must be activated as described above, and a physical customs declaration must be made, declaring the improvements performed when the aircraft is returning to the EU again. Wrong handling of the above, including a missing arrival declaration, could result in serious customs fines.


Potential problems for EU outsiders with a full EU importation

Any fully EU imported aircraft must follow the above. This will, in some cases, create problems for aircraft which have been fully imported by EU outsiders, such as US, Swiss, Middle East, and Asian operators, in cases where improvements have been made outside the mentioned 32 signatory countries, and where the Outward Processing procedure have not been activated prior to the workshop visit AND also without a new customs end-declaration completed when returning to the EU. The aircraft must be physically present within the EU to activate the Outward Processing procedure, and, e.g., an Asian based aircraft normally getting aircraft work done in Asia will, of course, not fly to the EU with the only purpose of activating the Outward Processing procedure, but there is a serious risk for fines if these procedures are not handled the correct way. Aircraft using Temporary Admission when visiting the EU will not have this problem.

What is the difference between normal maintenance and improvements?
The list can differ between EU member states, but the below is our suggestion of examples.

These examples are typically maintenance work:

  • Repair and/or maintenance of the aircraft by replacing batteries, brakes, oil, wipers, tires, etc.
  • Service, guarantee, or courtesy work, such as maintenance of the air conditioning system
  • Repair and/or maintenance of the aircraft engines

These examples are typically improvements:

  • Installation of a Wi-Fi system that was not installed beforehand
  • Installation of a new type of avionic or equipment that was not installed beforehand
  • Installation of a zero-time engine
  • Complete repainting
  • New seating and interior if the old was not worn out

How can we help?
If you have questions about the above, please do not hesitate to contact us. Please, feel free to contact us at any time.

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