Short & sweet no. 18
Exporting an aircraft from the EU

• The big surprise: what happens when an aircraft departs the EU? 
• What happens with the EU VAT when an aircraft is sold outside the EU?
• When is a formal EU customs exportation needed?
• What are the most frequent exportation questions?

In this article, we dive a bit deeper into this topic, look at the different use-scenarios, and add relevant comments.

The big surprise: what happens when an aircraft departs the EU?
A fully imported aircraft that departs the EU will be considered exported when crossing the outer EU border. The aircraft will hold this status unless it returns to the EU within the next three years – if everything else has remained unchanged. This three-year consequence is described in the Union Customs Code and, from what we have experienced, might come as a surprise.

Accordingly, a sale outside the EU will render an importation void if the importing entity was the owner, just like changes to the operator or lessee structure will render the importation void if any of these were the importing entity.

A prolonged stay outside the EU, counting more than three years, will also render an importation void and act as a permanent exportation even though the aircraft has not been formally exported and nothing in the owner and operating structure has changed.

This process is paperless for aircraft. Thus, it is up to the operator to document that an importation is still valid whenever the importation document is checked on the ramp by local EU customs (e.g., using flight logs to document time spent within the EU).

What happens with the EU VAT when an aircraft is sold outside the EU?
The VAT-paid status can only survive a sale and stay valid for the next owner if the transaction is considered EU VAT applicable, implying that an EU VAT-registered seller has calculated the correct local EU VAT or used a valid EU VAT number belonging to the new owner – and, in both situations, have issued an invoice to the new owner which has been correctly documented in the EU VAT system. Any sale outside the EU is exempt, but please be aware that the EU VAT is not a one-time thing. It is a transaction-based system, and any changes of ownership, operator, etc., can result in the EU VAT somehow must be accounted for again, e.g., by paying, deferring, exempting, or suspending the VAT.

When is a formal EU customs exportation needed?
We always recommend a formal EU customs exportation when the place of delivery is an EU airport where the sale is categorized as an export sale without any EU VAT implied. The same applies to all cases where an EU-domiciled seller is selling an aircraft even though the place of delivery is outside the EU. 

The most frequent exportation questions

Question 1: We are a non-EU aircraft owner based in the US and have fully EU imported our aircraft for free circulation reasons. We have now sold our aircraft with the place of delivery in the US. Do we need to return to the EU and export the aircraft before the sale?
Answer: No. Neither the seller nor buyer will have any EU customs VAT obligation or liability when an aircraft is sold outside the EU. This is even though no formal EU customs exportation has been performed.

This answer triggers the next question.

Question 2: So, why do our lawyers insist that an aircraft must be EU exported before a sale?
Answer: Our guess is that they use a belt-and-braces approach to avoid any (non-existing) risks and check off the EU exportation point.

Question 3: Do we need to export an aircraft flying under the Temporary Admission procedure?
Answer: No, any aircraft flying under Temporary Admission (TA) is automatically exported (technically termed discharged) when the aircraft crosses the outer EU border. Both arriving in and departing the EU are meant to be paperless. Thus, no customs formalities are needed to document an entry or exit. And just to avoid any misunderstandings – an operator must always be ready to prove TA compliance when flying within the EU. This requirement is separate from the subject of entry and exit.

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