Value Added Tax (VAT) and Mineral Oil Tax (MOT) on fuel uplifts in Europe have several options for exempting. Applicable rules and requirements vary depending upon the country, airport and nature of your flight.
The following is an overview of what you need to know:
The common perception in Europe is that if you present an AOC you’re exempt from MOT. But, if customs authorities audit your operation to verify your exemption status other qualifying criteria come into play. Although you must have an AOC to claim most MOT exemptions it’s technically not the AOC that qualifies you for exemption. To be exempt, your inbound or outbound leg must be operated as “commercial” purposes and your flight plan, on at least one of these legs, should be filed “IN.”
In Switzerland, fuel suppliers cross reference your fuel order with how you’ve filed your flight plan. If you present an AOC but have not filed your flight plan as IN, you’ll more likely not to get exemptions.
VAT recovery after-the-fact
It is always best to exempt VAT at the pump rather than claim VAT refunds after. If you’re not registered with a point of sale European VAT exemption program it is important to ensure your local fuel provider or reseller is VAT-registered in the country. This ensures all business operators will receive VAT-compliant invoicing and have the ability to reclaim VAT later. If you’re entitled to a VAT refund after the fact, be mindful that VAT reclaim companies usually charge fees of 30-40% of any VAT recovered.
In most of Europe, MOT and VAT exemptions are only available for operators considered as “airlines flying for reward.” Certain countries and locations, however, provide point of uplift exemptions for non-leisure operators. This includes the UK, EINN, Spain, Italy, and Sweden. Ireland has no MOT duties in place, and while GA operators pay VAT at all other Irish locations they are exempt from 13.5% VAT at EINN, if their next destination is outside the EU. Spain exempts all business flights from fuel taxes when a VAT or Tax ID number is presented. If you’re flying a business-related flight to a non-EU location, Italy will also exempt VAT at the pump. UK operators of non-leisure business flights may exempt taxes at the pump if they’re flying outside the UK, or have an eventual destination outside the UK. Keep in mind, however, that fuel is fully taxable in the UK if you’re flying domestic legs, with an eventual destination not outside the country, or if you’re flying international legs for leisure purposes.
To exempt VAT in most of Europe, flights must be for reward with the majority being international. “Majority” is considered over 50% in most of Europe, but this is not always the case. For example, France only exempts tax if the flight is for reward and at least 80% of flight legs international. To provide proof of this some operators carry an 80/20 certificate stating that at least 80% of flights are for reward and international. You can make your own declaration on company letterhead, but there’s specific wording that should be used. We recommend that operators carry copies of AOCs and 80/20 declarations to provide to fuel suppliers when operating in France.
Signing fuel delivery tickets
It is very important that fuel tickets be closely reviewed and verified prior to the pilot signing it. Look at the boxes that have been checked by the fuel supplier, and any notes on the ticket, before signing. In the case of a fuel ticket error it is very difficult to reverse your position later if the ticket has already been signed. This is a common mistake operator’s crew encounter.
In most of the EU, MOT is only exempt for airlines carrying revenue passengers. The UK, however, exempts most general aviation (GA) operators “flying for consideration.” In addition, the UK will exempt VAT at the pump so long as you’re operating for non-leisure purposes and are flying to an “eventual non-UK destinationFuel taxes in the UK are only exempt at the pump if it’s your last fuel uplift prior to departing to a non-UK destination.
Germany has specific rules for tax exemptions for operators of aircraft with a maximum takeoff weight (MTOW) of 12 metric tons or less. To exempt taxes you’ll need to go into the customs office to have an exemption certificate stamped. While this is usually done on a trip by trip basis, it’s possible to obtain six or 12 month exemptions for aircraft with an MTOW under 12 metric tons. Be aware that if you are exempt from duties in Switzerland at the point of uplift but do not depart the country within 24 hours of fueling then these exempted charges become fully taxable.