ARTICLE · 07 JULY 2010

Import Duties and VAT on Aircraft Leases

Bird & Bird

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The lease of an aircraft may involve the physical crossing of an EC border by such aircraft. This is considered as the importation of an aircraft. However, such importation should not necessarily trigger import duties or VAT.

European UnionTax

Brent Springael

The lease of an aircraft may involve the physical crossing of an EC border by such aircraft. This is considered as the importation of an aircraft. However, such importation should not necessarily trigger import duties or VAT. In this article, we will look at what the triggering events are. We will also look at when the lease of an aircraft is subject to VAT and who is responsible for paying such VAT to the tax authorities. Recent developments in this area are certainly noteworthy.

Aircraft Crossing Borders

Irrespective of the type of transaction (i.e. a sale or a lease), an aircraft crossing an EC border is considered as being 'imported'. In this context, what generally is referred to as "import duties", actually covers two areas of law: customs duties and VAT.

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