EU VAT FOR BUSINESS AVIATION
R E F U N D I N G
A N D
E X E M P T I O N S
If your business operates aircraft within the EU, VAT refunding and
exemptions can help reduce your operating costs.
This Leaflet outlines opportunities for EBAA Member Firms to take advantage of VAT exemption and refund
opportunities in the EU, Norway and Switzerland1. Opportunities exist for companies operating under AOC
license as well as for corporate operators. VAT rules do change from time to time so it’s usually prudent to check
how your fuel and other vendors apply these rules in advance.
1.
EU VAT Exemptions Available to All Business Operators
Beginning in 2010, most aircraft operating expenses for services (not goods or fuel) charged to businesses
located outside the host country should be VAT-exempt, or “zero-rated”. The “B2B cross-border” place of supply
rules applicable throughout the EU as of 1 January 2010 treat these supplies of services as occurring at the
purchaser’s place of residence, not where the supply is physically carried out. For example, overflight-ATC
charges from DFS Germany billed through EUROCONTROL to a UK corporate operator can be “zero-rated” free of German VAT – while taken into account as an offsetting input and output on the UK operator’s UK VAT
return.
The shift in the “place of supply” DOES NOT APPLY to services relating to land or to those services deemed by
the host country to be “used and enjoyed” within that country. There are no general guidelines to determine
whether a particular service relates to land or is “used and enjoyed” locally, so results will vary between vendors.
For example, many suppliers treat overnight aircraft parking in an “unassigned” slot as a VAT-exemptable
service, while others treat the parking as related to local land and apply their VAT. Germany treats take-off and
landing as relating to local land so taxes these charges. Check with your supplier how it applies these
exceptions.
To document your company’s eligibility for this special treatment, send a copy of your “VAT certificate of status” to
each of your services vendors. The COS certificate is available by contacting the VAT office where your
company files its regular VAT returns. Most VAT offices will send these certificates within a few days.
Alternatively, you can request your vendors to confirm your company’s “business” status by accessing the EU’s
“VIES” site and entering your company’s local VAT registration number.
2.
EU VAT Exemptions Available to “Airlines Operating for Reward
Chiefly on International Routes”
All supplies of goods and services to aircraft used by companies qualifying under the “airline” rule are exempt
from EU VAT. The “airline” exemption applies to all services incident to operating the aircraft and to fuel and
spare or repair parts. It does not cover non-operating costs like ground transportation or accommodation for the
crew or provisioning of the aircraft for passengers.
Although the scheduled and cargo carriers are the principal beneficiaries of this exemption, it also applies to
general aviation companies that can demonstrate their status as “airlines operating for reward chiefly on
international routes”. Most vendors require at least an AOC issued in the customer’s name, and many vendors
1
“Not directly applicable to Norway and Switzerland but similar rules apply in Norway and Switzerland.
also require further information before they’ll apply the exemption to management companies or others carrying
paying passengers.
Some vendors apply the airline exemption to all supplies made to the “airline”, regardless of whether a particular
flight is engaged in “for reward” carriage; some vendors apply the exemption only to “for reward” or charter flights
operated by AOC holders, even if such “for reward” flights constitute less than a majority of the company’s flights.
Check with your vendors how they apply the “airline” exemption and whether your operations may qualify under
your vendors’ interpretation. Unfortunately, there is no clear guidance in EU law or in the national laws of most
EU Member States. The best published guidance on the subject is in the UK’s HMR&C audit manual (VTRANS
110640 and 110650), which takes the view that all supplies to an “airline” are eligible for VAT exemption.
3.
Avoiding VAT Cash-Flow Impact under “Reverse-Charge”
An increasing number of EU Member States apply their “reverse-charge” systems to eliminate VAT charges on jet
fuel, repair parts and other goods supplied to other VAT-registered companies. When “reverse-charge” applies,
the vendor invoices without local VAT, and the customer reports offsetting input and output amounts on its local
VAT return, thus preventing negative cash flow from these VAT charges.
Member States currently applying the “reverse-charge” mechanisms to zero-rate the supply of jet fuel to a
customer that is VAT-registered in the Country where the uplift occurs include: Belgium, Finland, France, Italy,
Netherlands, Poland and Spain. Other Member States are considering adopting this rule so this list may grow in
time. Your fuel vendor may have more current information.
Your fuel vendors will need your local VAT registration number(s) in these countries in order to apply the
“reverse-charge” mechanism.
4.
VAT Refunds Available to Business Operators
When VAT exemption is not available and VAT is correctly charged in the EU, Norway or Switzerland, an EUbased business operator can generally apply for a VAT refund using the “8th Directive” refund procedures in the
EU and comparable refund provisions in Norway and Switzerland. Beginning in 2011, 8th Directive refund claims
are made electronically by a business operator located in Member State A for VAT incurred in Member State B.
All 28 Member States allow 8th Directive VAT refunding to business operators based in the EU.
Some States allow quarterly claims, but all claims for a calendar year have to be submitted before the end of the
subsequent September. Claims to Norway and Switzerland are due by the end of the following June.
If your operation is the flight department of a business company, check with the company finance or tax operation
whether there is an existing VAT refund program in place, and to be sure they are receiving the VAT invoicing
from your fuel and other suppliers. Many flight departments have arranged for these refunds to be credited back
to the flight department’s operating accounts.
If your company does not have a VAT refund program in place, there are several commercial services available
to hire. When looking at these, make sure the service-provider is familiar with the specific rules applicable to the
general aviation industry. Even if your parent company has a VAT refund program, your separate flight
department may implement its own program better suited to your needs.
5.
Special VAT Rules for Fuel: UK, Italy and Spain
Three Member States apply slightly different VAT exemption rules for fuel uplifts. It’s a good idea to check how
your fuel vendors apply these rules and whether they’ll need any additional documentation to apply these rules.

UK Fuel supplied in the UK is exempt from UK VAT when uplifted to a business (“non-pleasure”) flight
that is departing the UK. If you’re buying fuel directly from a UK VAT-registered fuel supplier, they’ll
normally document your business status and destination by a simple signature on the fuel delivery ticket.
If you’re buying through an intermediary that is not UK VAT-registered, it may be difficult to avoid a nonrefundable UK VAT charge. Some non-resident fuel intermediaries are UK VAT-registered, and these
providers may have their own mechanism to document your flight’s business status and destination.

Italy Italian fuel vendors normally will not charge Italian VAT to a business flight leaving Italy for a nonEU destination. Your business status and destination are normally documented at the time of uplift on
the fuel delivery ticket or on a special vendor-provided form. Italy also applies the “reverse-charge”
mechanism to zero-rate supplies of fuel to companies registered for Italian VAT.

Spain Most Spanish-based fuel vendors charge Spanish VAT to business operators, subject to reversecharge zero-rating for supplies to companies that are registered for Spanish VAT. However, Spain has
a special rule requiring fuel vendors that are not fiscally established in Spain, but which are VATregistered in Spain, NOT to charge Spanish VAT to business flights that are transiting Spain. There is a
self-assessment mechanism which is not enforced.
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Disclaimer: This Leaflet contains information that is believed correct as of February, 2015. However, the Leaflet
does not constitute legal advice. Contact your tax or legal advisor for guidance on application of EU and other
VAT law to any specific transaction.
The information presented above was prepared by VATAmerica, LP and should not be considered to represent
the views or positions of EBAA.
EBAA (European Business Aviation Association)
Avenue de Tervuren 13 a / Box 5
BE- 1040 Brussels, Belgium
WWW.EBAA.ORG