JasonC wrote:
Unless you can prove that VAT was paid when it was imported, there is still a problem. That you have a VAT receipt has nothing to do with it. The original VAT was never paid when it should have been.
While it might still be a problem, why is it your problem and not the importer’s problem?
For example. Person A, a non registered person, buy the aircraft from out side the EU and imports it. They ignore the VAT issue while they should have paid it.
Person A then sells it to Person B (also a private individual) a few years later. Under no circumstances should Person A be charging VAT to person B. Person A is a non-registered, consumer and doesn’t even have the option of registering for VAT if they wanted to. So person B should never have had anything to do with VAT. Transactions between end consumers are never subject to VAT.
Yet the VAT man has lost out because Person A didn’t pay the VAT on import. Why is this Person B’s problem and not Person A’s problem?
Is there some legal basis to attach the VAT to the asset? This isn’t normal practice, but there are exceptions (I’ve seen rules for attachment for VAT on property-land & buildings- for example). I’ve not seen such a rule for aeroplanes. Not saying there isn’t one…just never seen it. Hence my question! Is there a legal basis for attachment to the Aeroplane?
Of course being in the right isn’t much comfort when getting a grilling from a customs office who delays you, or worse impounds your aircraft until the matter can be resolved. Even worse if you don’t speak the same language.
I think there is indeed an “attachment” issue with aircraft.
There is no reason whatsoever to challenge the VAT status if the airplane is registered in the EU – if it was once registered in the EU the VAT status is clear.
Definitely incorrect for the UK and I suspect most countries because the vat status is not required to be proven when registering. Maybe in Germany you have to prove import vat was paid when going d-reg.
That’s what all aircraft dealers i asked told me.
The famous Mandy Rice-Davies quote comes to mind 
Peter wrote:
If the aircraft is on an EU register EU countries are prohibited under the EU VAT treaty from questioning the VAT status. THey can only check the VAT status of airplanes under their own registration. (France can only check F-reg, or N-reg, but not a G-reg)
Funnily enough I have been unable to find a reference to this when someone challenged it.
Funnily enough, I was going to ask for a reference too until I got to you asking for it! I suspect it’s more to do with residence. Let’s suppose you imported it and registered it in the UK but somehow managed to avoid paying VAT. Then let’s suppose the French picked up on this. They do their home work and discovered that the aircraft was imported but that it’s first place of landing in the EU was the UK (No surprise….that’s whey you live and registered it). Then the VAT is owed in the UK, so the French get nothing for their work.
If it turns out that there is no legal basis for this often quoted rule, then I suspect the above is the practical result.
I think there is indeed an “attachment” issue with aircraft.
Now I’m going to do a “Peter”!
Do you have reference for it? 
it’s first place of landing in the EU was the UK (No surprise….that’s whey you live and registered it). Then the VAT is owed in the UK, so the French get nothing for their work.
On that basis nobody would inspect any aircraft visiting from abroad.
Peter,
please give me an an example for a EU registered airplane beiing VAT checked in the EU.
I have never heard of such a case.
Sure, you do not have to believe a Cirrus dealer who has imported +800 airplanes to the EU. But i do believe them that an invoice by them showing the VAT proves that it was paid. This was confirmed by the german customs office too.
JasonC wrote:
Unless you can prove that VAT was paid when it was imported, there is still a problem.
A agree. The aircraft has been illegally imported, and therefore the aircraft is illegal, or it is simply not imported at all. So I guess at the end of the line someone has to finally import it legally by paying VAT, if they want to keep it. For a privately imported airplane that could cause problems I guess, but if a company import it there shouldn’t be any problems.
No matter how hard I tried to find an example: the only aircraft i could find that were VAT checked are N-regs. in the EU, and a couple of San Marino ones.
LeSving wrote:
The aircraft has been illegally imported, and therefore the aircraft is illegal, or it is simply not imported at all.
Rather the only illegality has been tax evasion. There is nothing illegal about the aircraft itself. The importer has committed tax evasion, but a subsequent purchaser hasn’t done anything wrong.
The only question that I can see, is if the unpaid tax can be attached to the aircraft. This would be a highly unusual situation, but not without precedent.
If you buy a computer from your local retailer, and pay them the VAT, but the next day the retailer goes bankrupt and never pays the tax over to the tax man, then the VAT was never paid on your computer. But the tax man doesn’t come after you for it. And it’s not just due to value. It could be a warehouse full of computers, and he still won’t come after you for it. You’ve done your bit. Otherwise every purchaser would require an indemnity that they would only release on proof that the VAT has been remitted to the tax man. Clearly business would grind to a sudden halt under such a system.
Would you be happy with paying for an expensive car if you knew that the tax man would come after you for the VAT if the garage went out of business before remitting their next VAT return?
The real question is, is there some part of some EU directive, or national legislation, which provides that the debt on an aircraft attaches to the aircraft in the event of a default and subsequent sale. I’ve never seen it, but it might exist.
The reason why I think they focus on N-Reg is because there might be some ambiguity about where the point of entry was. When did a temporary visit become permanent. If it happens to be on your soil, you can collect the VAT. There is much less ambiguity about an aircraft on a national registration which probably went through a process to get it onto that register after importation.
They focus on N-regs for another good reason: If you want to find one a/c for which VAT was not paid it will be an N-reg. There’s simply no way to buy a new Cirrus from a European Cirrus dealer without paying the VAT. So if it was bought NEW in Europe, the VAT is always paid.
