This business aviation blog post continues from our article last week, entitled: "How-To: Requesting Jet Fuel Quotes – Part 1: Know the Basics."
Business aircraft operators should always ensure they’re comparing apples with apples when reviewing competing jet fuel quotes. In some parts of the world, particularly Europe, fuel taxes can double or triple the base price of fuel. Depending on your type of operation, you may be able to exempt some, or all, of these fuel taxes, and your fuel quotes should always reflect this.
The following is an overview of what you need to know about taxes and related documentation when requesting a jet fuel quote:
1. Required fuel uplift documentation
Always confirm local requirements and documentation needed, in advance, with your fuel supplier. Some suppliers, for example, require Air Operator Certificate/Air Carrier Certificate (AOC/ACC) information in advance if there’s a fuel release involved. Charter (non-scheduled commercial) operators are often able to exempt Value-Added Tax (VAT) and Mineral Oil Tax (MOT) at the pump, so long as they present an AOC/ACC and other required documentation.
2. Correcting fuel ticket mistakes can be complicated
If you do not provide required documentation such as an AOC, or you sign a fuel ticket which adds taxes based on incorrect information displayed on the ticket, it can be difficult to correct after the fact. Fuel suppliers often close their books very early. If a request for correction is not done before the supplier submits data to government entities, the supplier may be unable to negotiate a refund for you. This may mean that the operator must contact the appropriate government entity directly to try to retrieve tax that was collected incorrectly, and this can take months to accomplish.
3. VAT and MOT dramatically impact uplift costs
Lowest standard rate of VAT in the European Union is 10%, but VAT can range to up to 25%. MOT has the potential to double base price of fuel in countries such as Germany, France, and Switzerland.
4. VAT can be recovered, in some cases, after the fact
There are cases where operators are not able to avoid VAT at the pump due to no exemption opportunities being available but may be entitled to recover VAT at a later time. Note that if you use a 3rd-party VAT recovery service to do this, you’ll typically pay the provider 20-30% of taxes recovered in service fees.
5. Fuel tax anomalies
When you land in India, and your next leg is domestic, you’ll be charged tax on the volume of fuel remaining onboard. This can be considered a form of import tax. In Switzerland, qualified charter operators may be exempt from VAT and MOT (so long as the specific flight is connected to an actual charter flight) on fuel uplift. However, if they do not depart Switzerland within 24 hours of the fuel uplift, exempted taxes then become due and payable.
6. Additional considerations
Note that fuel prices typically change –monthly, weekly, or daily – depending on the location and the supplier. Fueling hours of operation do not always mirror airport hours, and you may need to pay an overtime fee and/or provide advance notification for late-night fuel uplifts. Note that some fixed-base operators do not allow other fuelers on their ramps. You may need to use an alternate fuel provider or relocate to the other side of the airport in order to use your fuel provider of choice. Such restrictions have the potential to add additional time on the ground and may delay your planned schedule.
Use a fuel provider you trust and who knows your type of operation well enough that all applicable taxes/fees are included in your fuel quotes. If a fuel release is required, ensure that it’s forwarded in advance.
If you have any questions about this article or would like more information about fuel quotes, contact me at email@example.com.
Category : Best Practice
About Steve Woods
Steve Woods is an expert on aviation fuel and taxes and fees related to Jet-A1 uplifts. He currently serves as director, Sales and Supply, Europe, Middle East &Africa, UVair, and has more than 15 years’ experience with Universal. Prior to joining the UVair Fuel team, Steve, a native of the United Kingdom, served in positions in both Trip Support Services and ground handling at Universal, lending him a breadth of knowledge of all areas of flight operations. One of Steve’s specialties is his understanding of the complicated and varying differences by country of value-added taxes throughout Europe, as he played an integral role in launching the UVair European Fuel Services Limited in 2009. Steve can be reached at firstname.lastname@example.org.
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