European Excise Duties on Jet A-1: France, Germany, Switzerland, Italy, and Isle of Man
This business aviation blog post continues from our article last week entitled “European Excise Duties on Jet A-1: Guidelines for Business Aircraft Operators.”
While the EU has general guidelines covering excise duty and duty exemptions applicable to Jet A-1, each member state has its own particular rules. European Union member states – as well as countries and territories which are not members of the EU, including Switzerland, Sweden, and the Isle of Man – have their own policies on duty and duty exemptions. For business aircraft operators, it’s best to check with your fuel supplier/reseller on fuel duties and exemption opportunities prior to operating to the region.
The following is an overview of what you need to know:
1. What are rules for excise duty exemption in France?
To exempt fuel excise duties in France, you’ll need an Air Operator Certificate (AOC), and at least 80% of flights must be for reward and operated on international sectors. As long as your AOC and exemption declaration is shown at the time of the fuel uplift, your excise duty exemption should apply. Always check fuel tickets prior to signing to ensure that the duty exemption box is checked. Many operators carry copies of their AOCs and declarations – stating that over 80% of flights are for reward and on international sectors – to provide to fuel suppliers if there’s an issue regarding duty exemption status. Some 3rd-party Value-Added Tax (VAT) reclaim/aviation taxation specialist companies have been successful in obtaining France’s national tax on petroleum products (Taxe Interieure sur les Produits Petroliers [TIPP]) also known as “Taxe Intérieure de Consummation sur les Charbons” (TICC) exemption certificates for non-AOC-holding business operators, but, without such certificates, exemptions from excise duties in France for non-AOC holders are not possible.
2. How do excise duty exemptions differ in Germany?
In Germany excise duty on fuel is known as Mineral Oil Tax (MOT). Exemption procedures differ depending on if the maximum takeoff weight of your aircraft is under or over 12 metric tons. For aircraft of over 12 metric tons, you just show AOC documentation to the fuel supplier at time of uplift and ensure that the fuel ticket is filled out correctly – indicating “MOT-exempt” – prior to signing. If you’re operating aircraft of less than 12 metric tons, you’ll need to visit the customs office at each airport you visit in Germany to have an exemption certificate prepared and signed in order to obtain MOT exemption for that particular airport. Exemption certificates are valid for up to one year for specific airports.
3. What are excise duty exemption rules for Switzerland?
In order to exempt fuel duties in Switzerland, you must be a “commercial” operator and have filed a commercial flight plan. Commercial operations include charter (non-schedule commercial) operators with AOCs, for which either the inbound and/or outbound flights must have been conducted carrying fare-paying passengers. Your flight must be international – anything beyond the borders of Switzerland – in order to qualify for excise duty exemption. Be sure to show your AOC to the fuel supplier, ensure that the fuel ticket shows that duties have been exempt, and be aware that Swiss authorities will check to ensure that your flight is commercial and international.
4. What’s the procedure for Italy?
Excise duty exemption procedures for Italy are straightforward and less onerous than those for France, Germany, and Switzerland. In Italy there’s no requirement that a particular percentage of operations must be for reward or international to exempt excise duty on fuel. AOC holders simply present their certificates at time of fuel uplift and ensure their fuel tickets are filled out correctly, and duty exemptions will be applied.
5. Does the Isle of Man have specific or unique excise duty exemptions?
The Isle of Man, a self-governing British Crown Dependency, does not impose fuel excise duty on either private non-revenue or charter operators. The Isle of Man authorities have issued certificates of commercial use for business, non-AOC, aircraft operators listed on their registry. This certificate is not designed to take the place of an AOC, but to show that flights are being conducted for business purposes, which is believed by some that it entitles these operators to exemptions from excise duties. This certificate is not, however, accepted in place of an AOC in all EU countries – specifically Germany.
As a general rule, when operating in Europe, AOC holders with more than 50% of operations for reward and on international sectors are exempted from excise duties. Some countries – including Italy – do not have this 50% rule while others – Switzerland in particular – require 100% of operations to be for reward and international to qualify for exemption. To minimize fuel uplift costs, it’s important to know excise duty regulatory nuances for each country, so it is recommended that operators seek guidance from an experienced fuel supplier or reseller.