Temporary importation of aircraft into the EU – how does it work?
Monday 01 June 2015
By Grant Atchison, Head of Aviation, Equiom Isle of Man
Foreign aircraft flying into the European Union are subject to VAT and import duties. Nevertheless, in some cases, relief from these charges can be gained via a process of ‘Temporary Importation'.
An aircraft can undergo ‘Temporary Importation’ if it meets certain criteria, as laid down in EU Implementing Regulation 2454/93. Specifically, it must be owned outside of the EU, it must not stay in the EU for longer than 180 days and it must be used for private rather than commercial use. However, the definitions of ‘private use’ vs ‘commercial use’ have, in the past, been open to misinterpretation, causing much uncertainty.
Last December, a working paper published by the European Customs Code Committee provided clarity, by citing case study examples to illustrate these various definitions. The paper confirmed that many corporate aircraft flights are, in fact, eligible for Temporary Importation. For example, perhaps surprisingly, when an aircraft is used to carry brochures and promotional materials for a company, this is not determined as commercial. The aircraft is defined as being in ‘private use’, providing its primary purpose is to transport the owner or employees and the trip does not involve any form of remuneration.
Typical FAA Part 91 registered corporate operations are, for the purposes of EU customs, recognised as 'private use'. Therefore, a flight chartered outside the EU could claim relief on import duties, provided it does not transport passengers between two points within the EU.
Granting temporary admission is a straightforward process when applied for and handled correctly and, in most cases, owners need only make a verbal declaration when arriving in the EU. However, we do recommend that owners obtain an official Customs-stamped European Community Temporary Admission Form. This provides official clearance for temporary admission and is recognised in all 28 EU Member States.
In summary, the range of options available to non-EU aircraft owners is now clearer and there are numerous circumstances, applicable to both private and corporate aircraft, for which temporary admission declarations are acceptable. For operators who fall outside this spectrum, the option to apply for full importation is still available.
It is worth noting that the working paper only deals with ‘private use’ and ‘commercial use’ from a customs perspective. The application of VAT on such operations must be addressed separately.
This material is of a general nature only and does not constitute advice. Dealers should seek specific advice in relation to any decision or course of action.