All About Temporary Importation of Business Aircraft into the EU
This business aviation blog post is part two of a two-part article on aircraft importation into the European Union. Part one covered permanent importation of business aircraft into the EU.
There are ways to import corporate aircraft into the EU on a permanent importation basis without paying VAT, but there are no options available to private luxury (not for business purposes) flights. Private luxury aircraft are eligible to VAT at the current rate being used in the member state through which they are importing the aircraft.
The alternative available is a temporary admission (TA), otherwise known as a temporary importation (TI). As a TA does have certain limitations, it’s important to work with your 3rd-party provider to fully understand all regulatory nuances. Here are some key points to know about TA:
1. Temporary admission is not subject to VAT
TA into the EU allows for conditional relief of duties and taxes for non-EU registered aircraft. TA is limited to aircraft that are:
1) owned outside the EU,
2) not staying in the EU for more than 180 days in a 12-month period, and
3) not available to EU residents for flights within the EU.
EU citizens are allowed to travel within the boundaries of the EU, but only under certain conditions. Full details on temporary admission into the EU and the conditions for carrying EU nationals on non-EU registered aircraft within the EU are available from HM Revenue & Customs.
2. There is potential for problems with temporary admission
The single biggest problem with TAs is that operation of the aircraft is interpreted differently between EU member states. While TAs work well for truly “private” flights, some EU member states will classify private “corporate” operations as “commercial.” These countries view it as a commercial flight because the aircraft is being used as a business tool. If an EU member state or a customs unit at an airport within the EU view your business aircraft as “commercial traffic,” they may reject your TA unless the aircraft is only being used to transport passengers in and out (but not within) the EU.
3. Temporary admission does not usually allow for charter within the EU
TA of an aircraft into the EU does not automatically give you the right to conduct charter flights within the EU. Your 3rd-party provider can provide guidance on EU cabotage regulations and considerations.
4. It’s advisable to have a temporary admission form in writing
A TA can technically be an oral declaration, but difficulties have arisen in some parts of the EU with acceptance of oral declarations. Best practice is to reconfirm the oral declaration by obtaining an approved TA Form with a customs stamp and a written authorization from the aircraft owner allowing EU citizens to travel onboard. If you are employed by the non-EU owner and private use is allowed in your contract of employment, a copy of that should also be carried on board.
5. Rules for private use by a EU resident
If you are an EU resident, you can use the aircraft if both these conditions are met:
- the aircraft has been temporarily imported by the registration holder, who is a non-EU resident, for their own use; and
- the non-EU registration holder has instructed you may use it occasionally whilst they remain in the EU
Where the aircraft is registered in the name of a non-EU company/trust, an employee/member of the company/trust must be a non-EU resident importing the aircraft for their own use to meet these conditions. Non-EU residents employed or otherwise engaged solely as a pilot, crew member, or driver do not meet these conditions.
Written permission from the non-EU registration holder must be made available to customs/border agency officers if requested. This must confirm:
- the non-EU registration holder’s name and address, including a contact phone number/e-mail where they can be reached while they are in the EU
- that they are the registration holder or, if the aircraft is registered to a non-EU company/trust, they have written permission from the company/trust identifying their status or position within that company/trust and authority to act as registration holder
- when the non-EU registration holder imported the aircraft
- that it has been temporarily imported for the non-EU registration holder’s own use
- dates the non-EU registration holder will allow the EU resident to use it, including the EU resident’s name, address, and phone number/e-mail
- that the non-EU registration holder will remain in the EU during any period of use by the EU resident
- that you are employed by the non-EU owner and private use is allowed in your contract of employment. In this case, the owner does not need to be in the EU at the time of use. It is advisable to carry a copy of the employment contract on board as well as written authorization.
6. Commercial use is possible if you are an EU resident
Commercial use is allowed if arranged by a non-EU person and that person has given you written authority to use the aircraft on their behalf. Use is only allowed for the time it takes to transport the goods or persons to or from the EU, but not within the EU.
7. Know the validity of your TA
A TA is valid for up to six months and terminates if the aircraft leaves the EU within the six-month period. The aircraft may leave the EU and return on the same day to start a new six-month period with a new TA. When returning to the EU, it’s advisable to contact customs authorities in both the country and airport of entry to have a TA form stamped. Likewise, when departing the EU, it’s advisable to either have the TA form stamped for departure out of the EU prior to your flight out, or have it mailed back to the issuing office after departure.
As rules and costs of permanent importation have changed recently, more operators are considering TA. However, TA may leave you open to issues and risks. Be advised to carefully evaluate all options. Until the situation is clarified further in terms of permanent importation-tax issues, many operators are obtaining a TA for their non-EU registered aircraft. Be aware that rules and interpretation of those rules vary among EU member states, and this can cause issues for TA holders. For this reason, it’s advisable to talk to a specialist EU-importation lawyer.
If you have any questions about this article, contact me at firstname.lastname@example.org.