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Keep a plane in a registered VAT company for private use? (France)

Hi !

I’m searching for a plane to buy and i saw some with VAT not paid, planes registered commercial.

I wanted to know for a private use, what owners usually do ?
Pay the VAT or keep the plane in a registered VAT company ?

Here is what i could understand for now, but please tell me if i’m correct.

Plus :
- Not having to pay VAT for buying the plane
- not paying VAT on fuel
- not paying VAT on all expenses ( parking, landing fees, maintenance, avionics, …)
- about insurance, i’m not sure but in France there is no VAT on insurance, so same price i think.
- possible to invoice my company for flights use for work travel and pay no VAT on flight

Minus :
- having to pay VAT on each flight made for personal use so Hourly Costs +20%
- having to manage the company, accounting, bank account , annual taxes



LFMD, France

Initially, see here and here. There is also a general aircraft VAT thread here.

It would help if you filled in your profile, at least to some extent, because any answers will be highly country dependent.

Shoreham EGKA, United Kingdom

I’ve updated my profile, sorry.

Thanks Peter i will look these threads.

LFMD, France

The answer will depend primarily on the rules your tax authority operates for private use of business assets.

Here in the UK we have the Benefit in Kind system (do a search for “benefit in kind”, including the quotes, and you will find plenty of posts) and I am sure every other country must have a similar system otherwise everybody would be running their private hobbies via a company and reclaiming the VAT etc.

Otherwise, your post summarises it pretty well.

It is most likely that, for a mixture of business and private use, it is better to own the plane yourself (personally, not via a company) and charge your business for any business trips. In the UK you can charge for the proportion of airborne time spent on business trips, and you can use the total cost of the plane for the year as the starting point (not just the direct hourly cost). The same principle is available for cars but very few people operate it because we have the standard mileage charges which allow you to charge the company at (generally) 45p per mile and this does not need to be supported with any evidence other than a mileage logbook. AIUI, people operate the other system for really expensive cars e.g. a Rolls Royce. I believe there are private pilots who charge their company for business flights also at 45p/mile but unless they are flying a parachute with a lawn mower strapped to their back they will be losing out.

That said, France may well have a special concession for aircraft. I don’t know any French pilot who runs his plane through a company but there are many French pilots here and maybe someone will post on the subject.

Shoreham EGKA, United Kingdom
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