The impact of Brexit on aircraft importation into the EU

Brexit and EU aircraft importation – what's changing? We discuss the expected impact with David Prescott, VAT Consultant. 

How will Brexit impact aircraft importation into the EU for Equiom’s aviation clients?

The Isle of Man (IOM) and UK have historically provided avenues for our clients to import aircraft into the EU. However, with Brexit on the horizon, this will soon change. From 1 January 2021 any imports into the UK and IOM will no longer be deemed to be in EU free circulation.

For UK resident aircraft owners who carry out commercial activity in the European Union this may result in their aircraft having to be imported into both the UK and an EU country, for VAT purposes. 

After 31 December 2020, however, for non EU aircraft owners who only wish to use their aircraft privately, the removal of the UK and Isle of Man from the EU for VAT purposes opens up a new avenue of opportunity. They may choose to structure and register their aircraft to ensure that their wholly private use of the aircraft is granted within the EU under Temporary Admission. This exempts some items from customs duties (provided they meet certain criteria) and removes the requirement to import the aircraft into the EU and account for VAT on the value of the aircraft.

What is the alternative to importation via the IOM / UK?

There are several alternatives and Equiom’s recent expansion into the Netherlands has enabled us to extend our service offering for EU aircraft importations. We now have the substance in the Netherlands to form Dutch entities to own aircraft and also import into the EU (where required), complementing our other options elsewhere in Europe.

Will Brexit have an impact on aircraft registration?

Aircraft registrations are not connected to the EU VAT regime and the UK and IOM leaving the EU for VAT purposes will have no impact on registrations. The Isle of Man Aircraft Registry is consistently regarded as the best aircraft registry in the world, based on safety, efficiency and outstanding customer service - and this will continue to be the case.

If you require further information or advice about how Brexit will impact you or your clients, please contact David Prescott.