Changing importation duty and VAT tax rules are a constant headache to aircraft owners, especially in Europe. Aircraft finance and ownership specialist ICM Aviation helps owners make sense of the complex web of regulations that can prove costly and inconvenient. The Isle of Man-based group is here at the EBACE show (Booth T105), along with its UK-based sister company Martyn Fiddler Associates.
In March, ICM announced a new service to help individuals and companies import aircraft into the UK at VAT-free rates in response to earlier changes in the country’s VAT rules. “For 100 percent private usage you’re going to have to pay the VAT, and where the predominant use is private you should pay at the lowest rate you can find (e.g. Luxembourg),” ICM director Mark Byrne told Aeropodium’s recent European Corporate Aviation Summit in London. But where the aircraft is predominantly for business use, ICM has an alternative plan, involving indirect importation into the UK via the Netherlands.
“About a year ago we formed Martin Fiddler Netherlands–so we’re now able to import aircraft through the Netherlands in the name of the owner of the aircraft, but without them having to register for VAT as we act as the agent,” Byrne explained. “We account for VAT at 21 percent but defer until it is refunded, so in fact never pay. This is very similar to the old UK scheme.” He said that the process involves routing the aircraft through Rotterdam and a one-off transaction in the client’s name (with no need for offshore corporate registration processes, such as the Isle of Man’s Special Purpose Vehicles).
Those bringing aircraft to Europe for extended periods “may be able to take advantage of temporary admission rules,” said Byrne. “For non-European Union- registered or controlled aircraft, [this can be] for up to six months. But the rules are open to interpretation around Europe’s 28 countries–even though supposedly there is one VAT code for the EU.”
Byrne noted that the International Business Aviation Council had asked for guidance from the EU on aircraft importation and tax issues and put out a working paper on the issue in November 2014. “We advise that you get the piece of paper on board to say you’re coming in on a temporary admission basis–and the same outbound.”
Meanwhile ICM continues to assist aircraft owners wanting to register their assets on the growing Isle of Man registry. May 1 marked the eighth anniversary of the registry, which now has almost 500 aircraft. Over the past eight years, a total of 782 aircraft have been registered in the Isle of Man and authorities there also have handed some 8,000 pilot validations. On June 25, ICM will host the annual Isle of Man Aviation Conference.