The European Union is clarifying tax rules for foreign-registered business aircraft flying in European airspace. A working paper was issued this week by the European Union and its eventual implementation is expected to end the confusion, according to NBAA. Many owners of aircraft registered in the U.S. and other countries were unsure whether their operations would be subject to a hefty value added tax (VAT). The confusion centered around the definition of private and commercial operations and the new language apparently clears it up nicely. “This paper issued by the European Commission clearly resolves the confusion,” said Kurt Edwards, director general of the International Business Aviation Council. “As long as the operator meets the conditions for temporary admission, they can utilize the process to receive conditional relief from value-added tax and customs duties obligations, and operate to, from and within the EU.”
In many EU countries, an imported private aircraft is subject to the VAT but there is an exemption for foreign-owned aircraft that are flying temporarily in European airspace as long as they aren’t being operated commercially. However, there was inconsistency in the definition of private and commercial uses and the document issued this week gives clear guidance to 28 member countries on what is and isn’t a commercial flight. The new paperwork says flights by company-owned aircraft and charters qualify for the tax exemptions.
