Brexit and EU VAT status

Peter wrote:

have a vague memory of a foreign (say US) aircraft, entering the EU, say on a ferry flight to Australia, and having different maximum allowed time in the EU according to whether any EU national (read: EU passport holder) is on board. Or whether the owner is an EU national… And if you over-stay this time limit you have to pay import VAT. I recall it is 6 months if no EU national is involved, and a lot less otherwise. @eal may know more and will doubtless say if I am talking rubbish

That is pretty much correct. In my case as an EU national the six month rule applied to my Thai registered Jetprop. There is also a “Free Circulation” box you have to tick or otherwise on the GAR to confirm the VAT status of the aircraft. There used to be a set Customs paperwork trail to prove when the aircraft entered/departed the first/last European port of entry, but that was replaced by the aircraft journey logbook instead which is much simpler.

E

Any thoughts on free circulation of UK based N registration a/c in Europe post Brexit.
Also if you bought an N reg in Europe that was in free circulation and brought it back to base it in the UK, would you have to pay the VAT (post Brexit)

I suggest reading back up this thread.

Just to summarise in terms of what I have gathered from speaking to German customs:

• Union goods (i.e. aircraft “free for circulation in the EU”) located within the UK will lose their status on 1 January 2021. This means upon import into the EU (e.g. subsequent sale to someone based in the EU), VAT would be payable.
• This can be avoided if the aircraft is moved into the EU and is in the EU on 1 January 2021.
• Although theoretically a flight plan and journey log (and presumably airport parking receipts) showing that the aircraft was physically present in the EU on 1 January 2021 should be sufficient, it is possible to have the arrival documented by the customs authorities so that article 199 of regulation (EU) 2015/2447 can be met conclusively.
• This can be done by creating a proforma invoice listing the aircraft description, serial number and aircraft value for that flight to Germany, which German customs are then happy to stamp. Of course, they need to be satisfied that the aircraft is currently free for circulation in the EU. This is to comply with article 201 of said regulation.

IOW, a plane imported from the UK to the EU will be like any other imported into the EU from outside the EU; for example a plane imported from the US, from Switzerland, from the Channel Islands, etc.

I’ve merged two identical threads.

Wbardorf
What if the plane came to the uk via Denmark and vat paid (@0%) and free circulation document supplied,
Surely if then sold to the EU after Brexit then no vat would be payable.?

That’s more than 10 years since the Danish zero VAT route finished.

It’s a good Q, and I would think the Danish C of FC will not be of much use for selling the plane to the EU after 1st Jan 2021.

But who knows? Currently, Brussels is connecting any agreement on all aviation matters (with a few short term exceptions like jet engine etc certification by UK based 145 firms) plus all non-aviation matters, to an agreement on fishing rights, which is in turn connected to an agreement on various much bigger things which the UK is not likely to sign up to.

Rob wrote:

Wbardorf
What if the plane came to the uk via Denmark and vat paid (@0%) and free circulation document supplied,
Surely if then sold to the EU after Brexit then no vat would be payable.?

As @Peter said in the message below, there is no Danish zero VAT route anymore. However, if you are referring to the aircraft having been imported at that time, the customs clearance document would of course remain valid (as was the case in the last 10 years whenever you were flying around within the EU or re-entering the EU after a flight e.g. to Jersey). However, if the aircraft is in the UK on 1 January 2021, it will lose union goods status so a subsequent import into the EU would be equal to an import from any other non-EU country, e.g. CH→D or USA→D.

I found this page on the RYA website very useful with respect to the discussion on this thread as most, if not all, conclusions can be applied to aircraft as well.

https://www.rya.org.uk/knowledge-advice/current-affairs/Pages/brexit-what-happens-next.aspx

See “Does it matter where my boat is lying at 11pm UTC on 31 December 2020?”

And a few more interesting and useful websites:

https://www.withersworldwide.com/en-gb/insight/brexit-no-deal-where-should-my-yacht-or-private-aircraft-be-on-new-year-s-eve
https://www.theca.org.uk/news/rats/brexit_vat_yacht_purchases
https://www.gov.uk/guidance/pay-less-import-duty-and-vat-when-re-importing-goods-to-the-uk-and-eu#UK-EU

Based on my analysis and the information provided in the various websites, it seems to be most advantageous to have an aircraft within the EU27 on 31 Dec 2020 11 pm UTC as the aircraft would then enjoy EU27 union goods status and would also be eligible for returned goods relief (RGR) back into the UK. And it would be eligible for RGR for EU customs purposes when leaving the EU27 again for the UK. As long as the aircraft doesn’t stay outside the respective customs territory for more than 3 years (and the some of the other RGR conditions are met), one can retain the flexibility of the aircraft being regarding as UK domestic good and EU union good upon entry into their respective customs territories.

What about an aircraft imported from USA to UK (when it was EU) and G-reg (Vat paid), then subsequently (before 31/12/2020) registered to D-reg and based in EU before 31/12/2020?

The vat free document is UK but at a time when the UK was EU.

Any issues requiring measures to remain Vat paid in EU or all good?