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Aircraft VAT / import VAT / getting busted upon landing in the EU (merged thread)

There seem to be two different cases regarding the Danish route. (Please note I am just a pilot and no tax expert):

1) The plane (N or EASA reg) )was already in the EU but belonged to a VAT registered company

This company wanted to sell the airplane VAT free to a private person. An Danish company did purchase it VAT free with its VAT ID number and then it got sold on to the private person VAT free because of the Danish 0% VAT rule.

I have heard those deals took only few minutes. The tax authorities, probably those from the country where the selling European company was based, challenged such deals. Apparently in the end it came down to the details. If the Danish company was really advertizing the plane etc. such a deal was ok.

Apparently the tax authorities never got a full list of all cases from Denmark so only a portion of the cases got ever challenged by the authorities. In cases it got challenged my understanding is that the selling company was in trouble because this company would have been responsible for handling the VAT to the state.

2) The plane was imported into the EU via Denmark by its non VAT registered owner

The plane was initially outside the EU and then flown into the EU with its first landing in Denmark. The plane had to be declared to customs and the import VAT had to be paid. Apparently this was also 0% in Denmark at the time.

I never heard this procedure was challenged by the authorities. Until today it is common practice to first land at a place with a lower VAT rate (ELLX) and this seems to be legal.

As mentioned above even if the plane was in free circulation it is close to impossible to know if it still is. It could have been exported from the EU. But this would make no sense for anybody but a VAT registered company (which on the other hand had no benefit from the Danish import). I assume a large number of planes living now in the USA never got officially exported from the EU.

Also if the plane has been away for too long its customs status could have changed. But unless there is a detailed travel log in the plane the authorities will have a hard time proving this.

My bottom line is if the plane in question was imported according to the second case mentioned above and the Danish authorities confirm the paprwork is authentic (I once ran such a check in another country) I would write in the sales contract that the plane was imported by the seller on date xyz etc. and is in free circulation. There is probably not much more one can do besides paying the VAT again just to be sure ;-)

www.ing-golze.de
EDAZ

AFAIK most/all of the planes handled by Opmas (Lasse Rungholm) were case 2) above. IIRC, Lasse Rungholm owned the plane for the one day.

However I was offered what must have been case 1) on the new TB20, in 2002. I didn’t go for it because the guy doing it sounded shady and wanted a lot of money – about 1/2 the VAT saved.

There is probably not much more one can do besides paying the VAT again just to be sure ;-)

I know a few people who did that, but they did it only on “wrecks” or crashed planes, etc, whose market value was very low.

Administrator
Shoreham EGKA, United Kingdom

achimha wrote:

The French airport police are known to work with extortion

Do you just make this stuff up ?

The French Airport police (BGTA is the acronyme) do NOT deal with customs matters, that is the domain of the douanes trans: Customs (duh.)

FAA A&P/IA
LFPN

Whatever, police refers to the executive branch and what their suborg is called hardly matters. There are numerous reports about how frequently and strictly this matter is handled in France.

If they believe the VAT situation to not be in order, the airplane remains where it is. That’s something an airplane operator should be prepared for.

Achim has clearly had a bad experience, but mine has been quite the opposite.

My N-reg bushplane has been ramp-checked twice this year, once by HM Customs, and once by French police. In both instances the public servants did their work with a friendly efficiency which fell just correctly short of conviviality.

Incidentally, way back in this merged discussion, boscomantico wrote:

a French radio license
Once again: there is no such thing in France.

but my DGAC licence does include the separate qualification: “Radiotéléphonie en langue française”, suitably signed and stamped – which I think is as near as makes no difference.
Glenswinton, SW Scotland, United Kingdom

Peter wrote:

Since San Marino is in Italy

Nope, it is enclaved in Italy, but an independent state.

also it is clearly in the EU so (unlike living on the IOM for example) would not help you avoid getting the EASA IR in addition to the FAA IR.

Wikipedia says it is not the EU. http://www.smar.aero/licence_validations.php says they will validate any ICAO licence.

ELLX
Administrator
Shoreham EGKA, United Kingdom

Aircraft and VAT

We have a new bird coming in and a few questions regarding VAT for aircraft in Europe.
Has I understand, when importing a aircraft new or used from outside Europe you have to pay VAT. That is crystal clear.

What happen when you buy a used aircraft in Europe that VAT has been paid ?
Has I understand you don’t have to pay it again. Does anyone has a text for this ?

Thanks for the information
Safe flights
Romain

LFPT Pontoise, LFPB

So this assumes the aircraft is already in Europe?

The situation is exactly the same as any purchase of most things in Europe. If the seller is VAT registered they will have reclaimed the VAT when they bought and will charge VAT when they sell.
If the seller is NOT VAT registered they cannot have reclaimed VAT when they purchased, and cannot charge VAT when they sell

This is how VAT works. It’s not about aircraft in particular, and it is all dependent on the VAT status of the SELLER

Darley Moor, Gamston (UK)

@Romain I suggest reading back up this (newly merged) thread. There is a lot of info there.

One of the big questions is how do you prove VAT was paid on the original import – that one was never settled AFAIK, short of getting a C88 OR if the aircraft was made in the EU, proving it was never exported and re-imported. Someone here got burnt because his aircraft got exported from the EU to Jersey and then brought back to the UK…

Administrator
Shoreham EGKA, United Kingdom
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