I’ve just received an email from somebody, with a somewhat different version of @mancival ’s report above.
It says that the “Italian supreme court” has stated that an N registered aircraft can no longer be based in Italy since any VAT paid in Europe [ presumably they mean the EU ] is no longer recognised by Italy.
I have asked the guy for clarification / reference. If it is a court ruling then a reference must exist, obviously…
I wonder if @africaneagle knows anything.
This would be dynamite because it flies in the face of the EU system of import VAT.
Hey, dont get me started on EU import tax. I just had someone post me an old gopro from the UK. The Douanes want 80 odd euros to let me have it… Bastards.
Not recognising an EU Certificate of Free Circulation on an aircraft is quite something else…
chflyer wrote:
It is interesting that coverage of import VAT paid or not paid is still of such interest after all these years.
It’s because there is a comparatively strong group of owners that don’t want the problem to be solved!
It’s a not too well kept secret, that there are a significant number of aircraft in Europe (both foreign reg as well as national reg) for which the owner does not have a proof of VAT paid or a certificate of free circulation. Some of them are even 2nd or 3rd generation owners who bought the plane from a European seller (but not a business because then they had a VAT receipt) bona fide.
Those owners are a sometimes very outspoken group that promote the idea that “such papers are not that important”. There are aircraft forums in Europe where you basically get shouted down if you mention that an airplane without such proof has a 20% lower value than with it.
Some even argue there should be something like a limitation that if an airplane that was smuggled into the EU has been flying under the radar (;-)) for 10 years or so the VAT should be void even if the plane would leave the EU and flown back in again.
What about aircraft with EU VAT paid that has left EU to US, Africa, Norway, Switzerland, UK…for more than 6 months?
Let’s say DA40 made by Austria on OY-reg (it’s irrelevant to the topic of N-reg but the same VAT/Duty problem)
The report posted above claims that Italy is not recognising proof of EU VAT paid. That’s pretty new!
But interestingly nobody is saying anything 
One would think a court ruling would be widely reported.
If an aircraft leaves the EU for a certain time, it loses its VAT paid status. Plenty of posts on that in years past. That’s always been there.
Peter wrote:
he report posted above claims that Italy is not recognising proof of EU VAT paid. That’s pretty new!
Where do you read that? The article just talks about a tax evasion scheme – doesn’t say that the aircraft did have a EU VAT proof. As far as I can read, it doesn’t even talk about VAT at all!
In Italy (like in some other countries) there are more applicable taxes than just VAT. There is also something like a “luxury tax” that applies to Italian owners of certain goods. My first thought when reading the report has been, that the owners tried to avoid this luxury tax by claiming “we do not own the plane as it is owned by a US trust” and the court now ruled “we don’t care about legal ownership as long as you are the only final beneficiary…”
Ok – so as of now it is “an email by somebody” …
Not really shocking – esp. as such a Supreme Court decision would obviously not only affect airplanes but also boats, cars, etc. and therefore if the court really had made such a decision it is highly unlikely that the topic would not have made it into “mainstream media”.
Malibuflyer wrote:
It’s a not too well kept secret, that there are a significant number of aircraft in Europe (both foreign reg as well as national reg) for which the owner does not have a proof of VAT paid or a certificate of free circulation. Some of them are even 2nd or 3rd generation owners who bought the plane from a European seller (but not a business because then they had a VAT receipt) bona fide.
Different customs authorities clearly put very different weight on this. I have never heard this issue being discussed in Sweden. Certainly none of our club aircraft have proof of free circulation among their aircraft documents and no one have ever asked for it abroad. Possibly we have it on file somewhere…
Anyway, there must be a limitation period for tax debts just like any other debt.
