Flying to the EU · 2016-02-01 · Flying to the EU, VAT and duty, Full or Temporary Importation...
Transcript of Flying to the EU · 2016-02-01 · Flying to the EU, VAT and duty, Full or Temporary Importation...
Flying to the EU VAT and duty, Full or Temporary Importation
PRESENTED BY:
Lasse Rungholm, CEO, OPMAS
International Operators Conference | Tampa, FL | March 17 – 20, 2014
Regional Review: Europe - Thursday, March 20th | 12.30 a.m. – 2:00 p.m.
Flying to the EU
• Introduction
• What is the EU?
• Directives and regulations
• The language barrier
• VAT and duty
• What to do about it?
• Corporate or managed aircraft – VAT registration
• 135 / 121 – the airline exemption
• Video recap + Q&A
VAT and duty, Full or Temporary Importation
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Operational Challenges in the North Atlantic from an Operator‟s Perspective
Wayne Williams, Director of Flight Operations for ALA Services
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Flying to the EU, VAT and duty, Full or Temporary Importation
Lasse Rungholm, CEO, OPMAS
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http://www.iaopa.eu/mediaServlet/storage/gamag/apr07/p26_p29.pdf
39 http://www.iaopa.eu/mediaServlet/storage/gamag/apr07/p26_p29.pdf
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Lasse Rungholm, CEO
Lawyer (L), ATP, MES MEL
DC3, ATR 42/72, DHC6
Associated with DELACOUR
Frank Hansen, COO
MBA, WNG LVLR
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Started the Danish route more than
20 years ago.
Imported more than 2.000 aircraft
Plenty of references
www.opmas.dk
Flying to the EU
• Introduction
• What is the EU?
• Directives and regulations
• The language barrier
• VAT and duty
• What to do about it?
• Corporate or managed aircraft – VAT registration
• 135 / 121 – the airline exemption
• Video recap + Q&A
VAT and duty, Full or Temporary Importation
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• Why is this so complicated? Isn‟t EU supposed to be a union with
the same rules?
• EU is very, very complex
• 28 different member states
• 24 official languages
• Overall bureaucracy and disagreement
• EU Parliament example – how stupid is that?
What is the EU?
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• EU Parliament example – how stupid is that?
What is the EU?
http://www.spiegel.de/international/europe/meps-want-to-end-monthly-commute-between-brussels-and-strasbourg-a-934400.html
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• EU Parliament example – how stupid is that?
• Workers collect the containers and heave them onto eight large trucks, which then transport them to the second seat of the parliament 430 kilometers (267 miles) away. An army of 4,000 people, including MEPs, their staffs and lobbyists, pack their bags and follow. A week later, it's all schlepped back to Brussels.
• That monthly shuffle has been taking place 12 times a year for decades. Thousands of working days are lost in the move from Brussels, where committee meetings are held, to Strasbourg, where meetings of the whole parliament take place. Each year, it generates 15,000 metric tons of carbon dioxide and costs taxpayers some €180 million ($243 million).
• The hotels in an around Strasbourg charge exorbitant prices -- and the glass palace in Strasbourg, which cost hundreds of millions of euros to build, is empty for more than 300 days a year.
What is the EU?
http://www.spiegel.de/international/europe/meps-want-to-end-monthly-commute-between-brussels-and-strasbourg-a-934400.html
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• Why is this so complicated? Isn‟t EU supposed to be a union with
the same rules?
• EU is very, very complex
• 28 different member states
• 24 official languages
• Overall bureaucracy
• EU Parliament example – how stupid is that?
• An unruly class…
What is the EU?
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What is the EU?
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What is the EU?
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• Italy has Silvio Berlusconi – former Prime Minister
• On 1 August 2013 convicted of tax fraud
What is the EU?
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• The French clung to the
Paris meridian as a rival to
the Greenwich until 1911
for timekeeping purposes
and 1914 for navigation.
What is the EU?
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Flying to the EU
• Introduction
• What is the EU?
• Directives and regulations
• The language barrier
• VAT and duty
• What to do about it?
• Corporate or managed aircraft – VAT registration
• 135 / 121 – the airline exemption
• Video recap + Q&A
VAT and duty, Full or Temporary Importation
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Directives and regulations
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• Single market – free movement of goods and labour within
• EU‟s 1977 6th VAT directive – Numerous amendments
• Now consolidated into the 112th
• Just a legal framework for the member states
• Customs code – regulation of duty
• This is EU law – directly applicable – even so…
• Example: Temporary Importation – Istanbul convention
Flying to the EU
• Introduction
• What is the EU?
• Directives and regulations
• The language barrier
• VAT and duty
• What to do about it?
• Corporate or managed aircraft – VAT registration
• 135 / 121 – the airline exemption
• Video recap + Q&A
VAT and duty, Full or Temporary Importation
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The language barrier
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• How does the European Court of Justice work?
The language barrier
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62011CJ0033:EN:HTML
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• The Finnish case
The language barrier
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62011CJ0033:EN:HTML
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• The Finnish case
• 2 Falcons
The language barrier
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62011CJ0033:EN:HTML
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• The Finnish case
• 2 Falcons
• Used by X
The language barrier
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62011CJ0033:EN:HTML
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• The Finnish case
• 2 Falcons
• Used by X
• Owned by A
The language barrier
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62011CC0033:EN:HTML
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• The Finnish case
• 2 Falcons
• Used by X
• Owned by A
• Operated by B
• Scheduled vs charter operator
• “Supplied to” – “Used by”
• Look through?
The language barrier
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62011CJ0033:EN:HTML
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• The Finnish case
• 2 Falcons
• Used by X
• Owned by A
• Operated by B
• Scheduled vs charter operator
• “Supplied to” – “Used by”
• Look through? 0% VAT?
The language barrier
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62011CJ0033:EN:HTML
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• The Finnish case
• 2 Falcons
• Used by X
• Owned by A
• Operated by B
• Scheduled vs charter operator
• “Supplied to” – “Used by”
• Look through? 0% VAT? YES!
The language barrier
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62011CJ0033:EN:HTML
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• The Finnish case
• 23 The referring court’s doubts on this point appear to relate
to there being certain divergences between the different
language versions of that provision. In its observations, A
observes that some of the language versions, such as the
English and Swedish versions, refer to ‘international routes’
rather than ‘international traffic’, an expression which may
seem more generic and is used in most of the other language
versions of that provision, including the Finnish version.
The language barrier
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62011CJ0033:EN:HTML
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• The Finnish case
• 37 It should be observed, first, that the Finnish language
version of Article 15(6) refers to the ‘supply’ of aircraft ‘to’ an
airline operating for reward chiefly on international routes.
• 38 However, most of the other language versions of that
same provision refer to supplies of aircraft ‘used by’ such an
undertaking.
The language barrier
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62011CJ0033:EN:HTML
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• The Finnish case
• If you want to read more
download the in-depth
analysis of the judgement
from the OPMAS website
• Link below, ECJ
The language barrier
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Most aviators know the joke
about the old American captain
of a Pan Am 747 lost on the
taxiways in Berlin in the „70s…
Another example…
The German Coast Guard
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Flying to the EU
• Introduction
• What is the EU?
• Directives and regulations
• The language barrier
• VAT and duty
• What to do about it?
• Corporate or managed aircraft – VAT registration
• 135 / 121 – the airline exemption
• Video recap + Q&A
VAT and duty, Full or Temporary Importation
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• Key points
• All aircraft flying within the EU need to handle VAT and Duty
• The rules for VAT and Duty are not the same
• The state of registry of an aircraft does not affect tax status
• Aircraft must account for taxes at their first landing in the EU
• Full Importation vs Temporary Importation
VAT and duty
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• VAT 15-25 % when importing or selling
• VAT directive
• National VAT laws
• Place of supply
• Connection to duty regulation re TI
• Duty 2,7-7,7%
• EU regulation
• End Use exemption
VAT and duty
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Flying to the EU
• Introduction
• What is the EU?
• Directives and regulations
• The language barrier
• VAT and duty
• What to do about it?
• Corporate or managed aircraft – VAT registration
• 135 / 121 – the airline exemption
• Video recap + Q&A
VAT and duty, Full or Temporary Importation
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• Prior procedure for importing through UK and Denmark at zero
rated VAT for free circulation in EU eliminated
• Temporary importation good for infrequent visitors, but you must
follow the rules
• Full importation is recommended for frequent visitors or where TI
is not compatible
• Every situation is different so there is not a one size fits all
solution
What to do about it?
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• Temporary Importation
• It IS a paperless routine!
• Strict restrictions
• Private PERSONAL operations only or in/out only – NO
CORPORATE FLYING INSIDE EU (except inside the UK)
• Full Importation
• 100% as any EU company – same same but different…
• FREE CIRCULATION – IM A (C88) import form
What to do about it?
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What to do about it?
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• Introduction
• What is the EU?
• Directives and regulations
• The language barrier
• VAT and duty
• What to do about it?
• Corporate or managed aircraft – VAT registration
• 135 / 121 – the airline exemption
• Video recap + Q&A
VAT and duty, Full or Temporary Importation
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Flying to the EU
• VAT registration in Denmark, VAT is set off and nothing is paid.
• For commercial aircraft, corporate aircraft and aircraft under
management
• No need for a new entity – the existing company will work
• Owner, lessor, lessee, management company
• Economical activity required
• Written approval by Danish Customs ”SKAT”
• Physical importation overnight
• Aarhus international airport, EKAH, AAR, Denmark - DCT (T1)
• Turn key process
Corporate or managed aircraft – VAT registration
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• Introduction
• What is the EU?
• Directives and regulations
• The language barrier
• VAT and duty
• What to do about it?
• Corporate or managed aircraft – VAT registration
• 135 / 121 – the airline exemption
• Video recap + Q&A
VAT and duty, Full or Temporary Importation
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Flying to the EU
• AOC ”airline” exemption in Denmark, VAT exempt, 0%.
• The ”airline exemption”. For AOC holders only, includes charter
operators ref Finnish case
• Aircraft only under management OK if imported by AOC holder!
• NOT valid for other socalled ”airlines”
• No need for a new entity – existing company will work
• Written approval by Danish Customs ”SKAT”
• Physical importation overnight
• Aarhus international airport, EKAH, AAR, Denmark - DCT (T1)
• Turn Key Process
135 / 121 – the airline exemption
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Flying to the EU
• Introduction
• What is the EU?
• Directives and regulations
• The language barrier
• VAT and duty
• What to do about it?
• Corporate or managed aircraft – VAT registration
• 135 / 121 – the airline exemption
• Video recap + Q&A
VAT and duty, Full or Temporary Importation
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A video recap!
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Flying to the EU
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Flying to the EU
• Q&A
• Thank you
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