Importing business aircraft to the EU

While full importation provides broad rights, temporary admission provides restricted options in terms of cabotage.

Recently arrived G550 captain (L) chats with Universal Aviation Managing Dir UK/Ireland Sean Raftery at STN (Stansted, London, England). Raftery is fully conversant with procedures and best practices for both temporary admission and permanent importation of business aircraft to the EU.

Safest way to ensure your right to carry EU residents aboard your non-EU-registered aircraft is to do a full importation. Alternatively, you can go the TA route with physical TA paperwork and assorted evidence to back up any EU resident's use of the aircraft as being for private purposes.

"For TAs we always recommend that operators do it with a paper trail and customs stamps on entry and exit from the EU," says ARINC Direct ITPS Flight Coordinator Yergalem Wedila.

"Many operators choose to land at LTN (Luton, London, England) where a trouble-free TA process can be accomplished within an hour for a service fee of about £620. TA is a more attractive option than paying 20% VAT on the value of your aircraft, but you'll need to do research to determine what you can and cannot do under TA."

Avfuel Mgr Ops Phil Tyler says that most operators feel okay with TA and are seldom hassled by customs authorities or Safety Assessment of Foreign Aircraft (SAFA) ramp checks when transporting EU residents within the EU.

"In theory, you're only supposed to move people who are incidental to your flight and you should not make a stop just to pick up an EU resident for a flight within the EU," he says. "It's best to have the aircraft owner, or an officer of the company, on board and to have a letter stating the relationship of each EU resident to your company, whenever transporting residents within the EU."

Importation options and VAT exemption

Any operator prepared to pay full VAT may import a corporate aircraft into any EU country. They will need to provide certificates of registration, airworthiness and insurance, and supply a declared value of the aircraft.

If you're importing a Gulfstream G550, with declared value of $40 million, VAT would be payable to the UK, for example, at a 20% rate—or $8 million. "Pleasure" and "private" operators must always pay VAT when importing but options are available for other operators to import at zero VAT rates as "qualifying airlines."

Raftery says, "The European Court of Justice has issued an opinion that some corporate aircraft can be considered 'qualifying airlines' for purposes of importation at zero VAT rate, as long as they have an air operators certificate (AOC).

So, if you have an AOC you can argue that you're a qualifying airline flying for reward on chiefly international routes. If you operate a corporate aircraft without an AOC there's an option available to fully import your aircraft into the EU, at zero VAT rate, via Denmark. Denmark has a looser interpretation of the rules and VAT does not change hands.

It's important to get legal and professional advice early on and to do this process correctly. Otherwise, you may initiate the process and end up having to pay VAT."

Many operators do not want to risk making a qualifying airline declaration, says Linebaugh. "Trying to get yourself considered as a qualifying airline is a major procedure and, once you do this, you must abide by all commercial rules and regulations within the EU. We're all still trying to find a better loophole."

Importation considerations

As UK-based Rade Aviation Dir Phil Rawlins points out, "The great majority of corporate missions to the EU do not transport EU residents within the EU and therefore there are no issues with VAT or customs and no requirement to import the aircraft.

For operators who do intend to transport EU residents within the EU it's important to work with your service provider to determine what options are available. TA works just fine for most operators who have occasional need to transport EU residents but there are always exceptions."

Red flags go up with customs authorities whenever you're moving EU residents within the EU who could be using the local airlines, says Tyler. "Customs people have a lot of authority, things are not always black and white and they can hassle you all they want.

You could be caught for what may be deemed inappropriate use of your aircraft, during a customs interview or in the event of a ramp check. In practice, operators are not frequently challenged on transport of EU residents. If you're planning any sort of unusual or nonstandard operation with local transport of EU residents, however, do research in advance to protect yourself."

Falcon 900B at CPH (Kastrup, Copenhagen, Denmark). In some cases it has been possible to import business aircraft to the EU via Denmark without an AOC and without having to pay VAT.

Adds Snider, "The EU has 27 different sets of laws that do not match up exactly. Any time you're considering taking EU residents aboard your aircraft take a look at your particular operating scenario and consult with an expert on EU regulations."

While a physical stamped TA provides no additional rights this option does give many operators an additional degree of comfort, says Wedila. "TA paperwork should be stamped by customs at your exit point from the EU—although on occasion the local customs officers may not be familiar with the exit stamp process."

Linebaugh says it's important for charter operators to consider importing their aircraft even though all passengers must be listed on charter permit requests. Most charter operators are able to import aircraft at zero VAT rates provided they have an AOC and are flying mostly international operations.

Future directions

The hope is that zero-rated VAT full importation options will resurface in the format they were in before Jan 2011—or at least at more reasonable VAT costs. For the foreseeable future, however, this does not seem to be in the cards. TA will likely remain the preferred option for operators who are unable to take advantage of "qualifying airline" exceptions. For the vast majority of GA operators to the EU, says Rawlins, current TA options should be more than adequate for day-to-day ops.

Editor-at-Large Grant McLaren has written for Pro Pilot for over 20 years and specializes in corporate flight department coverage.


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