Tax and the operator: the risks every aircraft operator should be aware of in Europe!
Heather Gordon and Greta Kemper were invited to EBAA AirOps on 14 February 2023 to provide a training session on the risks facing aircraft operators in Europe. In case you missed the presentation, here is a summary of the key takeaways:
What is at risk?
Often it will be operators and their crew teams who will be involved if one of their client’s aircraft is subject to a customs inspection on arrival in a jurisdiction. While crew may be knowledgeable about their clients, knowing what not to say and who to contact is very important for both operator and aircraft owner.
Tax and customs are complex areas and when approximately 20% of the value of the aircraft, grounding of the aircraft, could be at risk (not to mention grounding of the aircraft and knock-on time delays) it is an area to regard seriously.
Whether a client is purchasing a new aircraft, or an aircraft is being transferred in from another operator, it is vital to understand the background to the purchase and tax planning. For example, did a previous operator import the aircraft and the transfer will require further tax and customs planning? Is the aircraft required to be chartered for an amount of hours to satisfy its tax registration? Will the owner be charged at the same rate as third party client?
The answers to these questions will help operators reduce their risk exposure when looking after client aircraft. It will also allow for the smooth flow of information between the aircraft owner and operator which can otherwise become a source of frustration.
The visible and invisible
While the physical checking of documents at immigration is something which has become second nature, not all tax and customs events are visible or known to the owner and crew – but they do happen! Temporary Admission and Returned Goods Relief are great examples of special customs procedures which work in the background and apply to aircraft even though they are not visible to the parties using the aircraft.
While a growing amount aircraft of operators now understand the importance of getting high level training to reduce their risk exposure, education is still lacking across much of Europe. It is important to remember that a taxable event occurs every time an aircraft crosses a border – whether or not the owner or crew are aware of this – and customs officers and not well known for their tolerant attitude towards business aircraft.
What is Europe and why EBAA?
The European area continues to be a complex geographical zone made up of numerous tax and customs territories. Each territory contains multiple national and domestic tax and customs systems with different government departments looking after different rules, and with different interpretations and understandings of the rules - even within the same country.
It is simply not possible to have one person who understands all tax and customs rules. The EBAA works with national aviation associations, business, trade bodies and educational institutions to create a network of specialists in many areas, including aviation customs and taxes. Access to members of this network helps improve the flow of information and education amongst the business aviation community.
Martyn Fiddler Aviation is proud to be an EBAA member and part of the EBAA tax and customs network. We work together with specialists all across the European area to ensure we remain at the leading edge of business aviation tax. Our chartered tax advisors, customs specialists, lawyers and administrators have over 200 years of combined business aviation experience – we use this to give back to the EBAA network and are proud to providing training in our specialist areas.
If you would like to learn more about Martyn Fiddler Aviation or organise a training session with Heather and Greta please do get in touch.
The information included in this article is considered true and correct at the date of publication; changes to rules and regulation made after the time of publication may impact on the accuracy of the information referenced or inferred to in this article. The information in the article may change without notice and Martyn Fiddler Aviation is in no way liable for the accuracy of any information printed or stored or in any way interpreted and used by the user. This article or the information contained in it is not provided or intended to be used as advice of any form.
If you have any doubts or would like to discuss any aspect of this article, please do not hesitate to contact one of our experts who will be happy to discuss your individual circumstance.