Short & sweet no. 2
Flying commercially within the EU

• Can Temporary Admission be used to fly commercially? (YES!)
• What is the real difference between Temporary Admission and full importation in this context?
• Which limitations disappeared in 2016?

This Flying commercially within the EU issue describes scenarios where an aircraft brought into EU by a non-EU operator that uses the aircraft commercially for charter (such as part 135).

The customs aspect of flying within the EU
Any aircraft flying into the EU will operate under customs control using either the Temporary Admission procedure (TA) or full importation (FI). There are no other options. The TA procedure can only be used by EU outsiders where the aircraft is owned (including any UBOs), operated, registered, and based outside the EU, leaving EU insiders with only one option: full importation. EU outsiders can, of course, choose to use full importation instead of TA if they find it beneficial. However, both options can be used commercially or privately if applied correctly.

It is often tricky for laypeople to see the differences between the two entry options, but the flexibility and long-term consequences are very different, and there are certain conditions, which must be taken into consideration when opting for TA or FI. Non-compliance with either the TA or FI regulations will most likely activate a direct payment of the VAT (ranging 17-27%) and customs duty (2.7-7.7%). Please, see the below-mentioned TA and FI scenarios A-C.

A: Flying charters under Temporary Admission

EU Customs Code restrictions: The aircraft can be used for any purpose *)
Traffic restrictions: Proper traffic rights must always be obtained from the competent authority where needed.
Internal EU trips with EU resident passengers: Yes, this is allowed.
Period of stay: Up to six months of flying within the EU.
EU base: Not possible.

Flying charter under TA is, regardless of the commercial aspect, considered to be private use in the EU Customs Code and grants extra privileges for how the aircraft can be used and the period of stay.

*) When the aircraft is used against a ticket fee it will be considered commercial use, please see scenario C.

B: Flying charters under full importation

EU Customs Code restrictions: The aircraft can be used for passenger transportation without customs restrictions.
Traffic restrictions: Proper traffic rights must always be obtained from the competent authority where needed.
Internal EU trips with EU resident passengers: Yes, this is allowed.
Period of stay: Unlimited.
EU base: Yes, this is allowed.

C: Flying charters under Temporary Admission selling tickets or similar (like airlines)

EU Customs Code restrictions: The aircraft can only be used for passenger transportation with a ticket-like payment.
Traffic restrictions: Proper traffic rights must always be obtained from the competent authority.
Internal EU trips with EU resident passengers: Yes, this is allowed.
Period of stay: As long as the charter takes yet limited to maximum 24 months. Here, the aircraft must leave the EU as soon as the charter ends if the aircraft is in an EU airport.
EU base: Not possible.

Flying charters under TA selling tickets or similar is considered commercial use in the EU Customs Code and grants limited privileges for how the aircraft can be used and the period of stay. Such a commercial flight cannot start as a Part 135 or 121 and continue as a private flight when inside the EU. Flying charters under TA selling tickets or similar is also the procedure used by all foreign airlines flying to EU destinations, but it is, of course, difficult for non-EU airlines to get traffic rights for internal EU trips which is often the real limitation in this category.

Consequently, an operator that sells tickets will be placed in this category C. This is not a catastrophe as any non-EU operator will normally fly back home immediately after the charter ends. It is not an option to take an extra rest or wait for a new charter within the EU before flying back home. A ticket-like payment or a group charter fee split between and invoiced to each person on-board the aircraft will give the same result.

The below-mentioned limitations have not been a part of the EU Customs Code since 2016
We have often been met with the argument that the restrictions below are why charters within the EU are not possible under TA. However, this argument is not valid as these restrictions have not been included in the EU Customs Code the last five years and are still not included in the EU Customs Code.

1. Internal traffic is not mentioned as a customs restriction anymore in relation to the use of TA. It is, of course, still the responsibility of the operator to secure traffic rights, but a violation can no longer create a customs debt.

2. Commercial use traffic in relation to the use of TA (scenario C) is no longer limited to flights which begins or ends outside the customs territory of the Union but solely limited by the terms for the period of stay mentioned in scenario C.

Traffic rights
Non-EU based operators will have to apply for traffic rights on internal EU flights in some EU member states, pending on the type of flight performed. Aviation traffic rights (freedom rights) will still be needed even though the aircraft is already correctly customs handled with the use of the Temporary Admission procedure or a full importation. Always ask locally if you have any doubts.

The TA procedure has become a very well-defined customs procedure
Please note that TA can be used to fly privately, corporately, and commercially within the EU without any problems and with EU-resident persons onboard, if applied correctly. Moreover, since 2014 the TA procedure has become a very well-defined customs procedure, especially for corporate and commercial aviation. This is thanks to the huge effort from, e.g., the EU Commission and NBAA.

Important things to know about Temporary Admission
Operators should be aware off that different interpretations of the TA procedure exist between member states, thus also why it is important to have a competent customs agency to 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 and Greece, and less often other places. Click here to see a list of the known grey zone areas where different interpretations of the TA procedure exist between member states and the areas where an operator often need guidance to use TA in a safe way. Yet, none of the situations cause problems for using TA if handled and documented correctly.

Important things to know about full importation
Operators should be aware off that full importation includes a potential VAT and tax liability and requires onwards continuous correct worldwide economic activity as well as correct handling of any potential worldwide non-business use and 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.

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