From what the European Commission’s Customs Code Committee (CCC) told the International Business Aviation Council (IBAC) in 2014, you would think there was no wrong answer when it comes to the temporary admission of private use aircraft into the EU. The temporary admission procedure allows certain aircraft to operate in the EU with exemption from customs duties or VAT, but there is much greater allowance for private than commercial use aircraft.
The CCC’s position is important. As well as being expert it is consensual. The IBAC had requested clarification of the term ‘private use’ and ‘commercial use’ in the context of temporary admission of aircraft amidst concerns that there may be varying interpretations by Customs Authorities across the EU.
In reply to IBAC, the CCC produced EU guidelines with case-specific examples. It confirmed, for example, that a Canadian company flying its Canadian-registered corporate aircraft with Canadian citizens on board from Montreal to Paris and Nice for business related meetings with local offices, staff, customers, and suppliers does meet the conditions for private use under temporary admission. So would a UAE-based company which charters a UAE-registered jet to take its non-EU employees from Dubai to Amsterdam, Paris, and Rome. And so would a resident of the U.S. who owns his aircraft and pays a management company to provide crew and support. If he flies his aircraft from the U.S. to various destinations in the EU to watch a football tournament and invites some EU and non-EU friends to join him at no cost to them, that is private use under temporary admission, not commercial use.
In all these so-called ‘business aviation’ examples, private use with total exemption from duties and VAT applies for flights into and between points across the EU under temporary admission. This is the case even if the aircraft carries and sells company promotional materials; and even if the cabin crew of the aircraft are EU citizens or residents.
The CCC’s answer was sufficiently clear. It established a predictable operating environment among non-European Union operators flying into the EU. So why have the CCC guidelines not had the immediate impact of attracting more temporary admission users of aircraft in the EU?
Some cite inertia – owners and operators have for too long been told that the EU is a tax magnet and all tax relief regimes there are traps to be avoided. Others blame commercially driven industry stakeholders who present the temporary admission procedure as overly complex and instead promote permanent importation “solutions”.
The truth is more mundane. Any attitude shift takes time, but foreign aircraft owners will sooner feel assured of their right to use aircraft in Europe under temporary admission without risk or fear of tax evasion.
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