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Denmark 0% VAT route may be back

LeSving wrote:

Hmm, in Norway all clubs are compensated for VAT. VAT is payed as usual (importing an aircraft for instance, or any other thing for that matter), but the VAT will then be compensated when applying for a special VAT compensation for organisations run by volunteers. It has nothing to do with the usual VAT procedures for businesses, but works largely in the same way for the individual club or organisation.

Congratulations! In Sweden, clubs have to pay VAT in full.

ESKC (Uppsala/Sundbro), Sweden

Hmm, in Norway all clubs are compensated for VAT. VAT is payed as usual (importing an aircraft for instance, or any other thing for that matter), but the VAT will then be compensated when applying for a special VAT compensation for organisations run by volunteers. It has nothing to do with the usual VAT procedures for businesses, but works largely in the same way for the individual club or organisation.

The elephant is the circulation
ENVA ENOP ENMO, Norway

Peter wrote:

However, it is 100% legal to organise one’s affairs so as to minimise the amount of tax one pays. It is formally a duty a company has to its shareholders. An individual is required to comply with the tax law, not a penny more.

Some countries do have laws that prohibit business transactions made for the sole purpose of evading tax — i.e. transactions completely unrelated to the actual business of the company.

Last Edited by Airborne_Again at 25 Oct 18:04
ESKC (Uppsala/Sundbro), Sweden

Peter wrote:

However, it is 100% legal to organise one’s affairs so as to minimise the amount of tax one pays. It is formally a duty a company has to its shareholders. An individual is required to comply with the tax law, not a penny more.

That was the constant caselaw in the 1970s and beyond. Now there are ever more rules that allow the tax office to disregard such an organisation. It started with “if the sole objective is to minimise the amount of tax”, then “if there is no other substantial objective”, then “if it is the main objective” to “if it is one (of possibly several) main objective”.

Last Edited by lionel at 25 Oct 15:01
ELLX

Malibuflyer wrote:

Not at all saying, it’s not legal or not legitimate!

This proves the point if you just pay the VAT because you feel it is appropriate this does not mean at all the state will apply some mercy on their side. You could have payed millions the day before and they will still go after you like crazy for 100 Euro the next day.

Especially regarding VAT the states created a system where probably over 99,9% of aviaiton are exempt which means the second hand market for VAT paid non reclaimable (bigger) planes is nearly non existent. The idea behind VAT for private persons is that it is a consumption tax you pay for the whole lifecycle of a product and not to pay and loose full VAT for 3 years of ownership. So I think it is legitimite for the last few remaining VAT payers to search for solutions.

Some might not see how big this is but just as an example at our airport I am not sure the maintenance company does more money on maintenance or on running small aircraft charter companies with the sole purpose to defer VAT. You even notice people run out of ideas for the names of such companies which get more and more generic over the years.

www.ing-golze.de
EDAZ

Malibuflyer wrote:

it seems to be completely legal (and legitimate) that if a pilot fails to fulfill a reporting duty to tax authorities (as discussed in the other thread), these authorities claim VAT even if the pilot intended to leave the customs area the next day

Absolutely not. It is completely disproportional that a minor mistake leads to such huge consequences, so it is not legitimate at all. It might not even be legal. As I wrote before, in the UK the customs authorities, who applied similar draconian law to the letter by confiscating cars (wort thousands) where occupants did not declare items to customs (worth a few hundred, and a few tens in avoided duties) because they were “a vehicle used in a customs offense” were eventually stopped by the courts from doing so.

The all-powerful state has constitutional limits to what they can inflict on their citizens.

Biggin Hill

Not at all saying, it’s not legal or not legitimate!

Same way, however, it seems to be completely legal (and legitimate) that if a pilot fails to fulfill a reporting duty to tax authorities (as discussed in the other thread), these authorities claim VAT even if the pilot intended to leave the customs area the next day…

Germany

It may appear somewhat ironic indeed

However, it is 100% legal to organise one’s affairs so as to minimise the amount of tax one pays. It is formally a duty a company has to its shareholders. An individual is required to comply with the tax law, not a penny more.

The German pilot got busted using what many would regard as an exploitative move, bordering on entrapment (not only because there is no practical appeal route, etc).

The Danish 0% VAT route is legitimate, if it is legal

Any tax avoidance measure may come under attack under the general anti avoidance provisions, as in this German case but this can never be fully exploited because that would contravene the 2nd paragraph above.

Administrator
Shoreham EGKA, United Kingdom

Kind of funny:
In this thread we discuss that there might by an opportunity by taking the law very literally to avoid import VAT in cases where EU regulators definitely intended to collect such import VAT (because it is a true import) while…
… in the neigbour thread we complain that the tax authority takes the law literally and not as intended to collect VAT from an unfortunate Swiss pilot who failed to properly report a temporary import to the union.

Germany

lionel wrote:

So if the plane it buys is VAT-paid (the person it buys it from is not a VAT-taxable person, or that person has not deducted input VAT on that plane), then the resell sales price is subject to French/German/… VAT only on the portion of the sales price that exceeds the acquisition price.

There must be a reason why German government makes so much tax income ;-) Over here they are greedy, as far as I can tell unless you are a dealer such sale would simply trigger the full VAT again. Not much on planes but more reading on cars and I assume it is the same. It seems therefore a very bad idea to buy a VAT paid plane from a private person as a German company.

Peter wrote:

is by acting as an agent for the seller.

I think the main reason for that is warranty. As a dealer you have to give a private customer a major warranty by law. Regarding what might go wrong financially on an aircraft such warranty would be suicide. In fact the same on high value cars. Try selling such a car and all dealers will try to act as agents only.

www.ing-golze.de
EDAZ
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