Importation: A Global Issue Decided By Local Officials
There isn’t a sports fan on the planet who can’t recall, with vivid detail, the time their favorite team or athlete was robbed of sure victory. Often, the win-stealing culprit was the referee on the field who made, in the mind of the fan, a bad call in the moment. Bad call or not, the referee’s interpretation of the rules and decision in the moment rarely gets overturned.
Aircraft importation is much the same. Despite efforts to make the rules clear, oftentimes the decision about whether an aircraft is subject to importation is a judgment call. Like many sporting events, trying to predict the importation status could depend heavily on the official standing on the field when you land.
The Importation Evaluation
Aircraft importation has been around for a while. But it rose to prominence during a time when the recession had aircraft owners looking to save on operating expenses any way they could. And, to a lesser degree, some owners wanted to play down having a corporate jet on the company’s books. They figured if they could legally register their jets in another country, pay lower taxes, keep the aircraft off the home country’s record books and still hangar it at the local airport (occasionally), then why not?
It didn’t take long for governments around the planet to catch-on. And with value added taxes (VAT) running between 12% and 26% of the price of an aircraft, countries knew they were missing out on much-needed tax revenues. The answer was to bring importation regulations back to the forefront, sharpen them up and enforce them.
Importation taxes and fees, in the broadest sense, have to do with a number of different factors revolving around interpretations of aircraft usage. There are basically two type of importation:
- Permanent—In a sense, you’re buying dual-citizenship for your airplane by registering it, and paying all related taxes, in another country. In exchange, an aircraft owner/operator enjoys the rights of any other airplane-owning citizen. It’s the more expensive approach, but it buys freedom of movement and peace of mind.
- Temporary—Usually the costs for temporary importation are nil or very small. And, depending upon the country, may simply be declared orally on arrival. If oral declaration is not an option, then forms can be completed ahead of time merely requiring a stamp after landing. If the airplane is just passing through, or will be making limited trips for a limited time (say for six months of shuttle negotiations), then temporary importation may be deemed acceptable.
So, How Do You Know?
So far, importation seems pretty simple. And, in some cases, it can be. But remember the referee mentioned above, the one who makes the judgment call on the field in the moment? If your goal is to declare temporary importation, understanding the official making the call is as critical as understanding the rulebook they’re using.
The answers to these questions will guide you, and more importantly the customs agent where you land, on the type importation you might be facing:
- How is the airplane being used?—If you’re flying charter, or making a sales/demo flight, there seems to be universal agreement that you’re a perfect candidate for temporary importation. However, most Part 91 (U.S.) operations are considered commercial in the eyes of most EU nations (check local regulations). This designation greatly diminishes your option to declare, and receive, temporary importation.
- How long will it be staying in the country in question?—If you’re temporarily repositioning an airplane to a foreign country, or will see more regular trips to a foreign country for a period, you’ll still likely to qualify for temporary importation. A general guideline seems to be that you’re considered temporary if the airplane will be in the country for less than six months during a given 12-month period. More than that, and you’re likely looking at permanent importation.
- How much flexibility do you have in your flight plan?—If your flight plan to another region of the world allows for some flexibility, importation can sometimes be more predictable, easily managed, and less expensive if your customs entry can be administered at a location other than your final destination. Or, say you have several options for a fuel stop when your first reach someplace like the European continent from North America. Why not pick the stop that will also make importation easier and less expensive? A bit of research and some creative flight planning can help ease the burden of importation significantly.
- What is your comfort level?—For some owner/operators, it’s simply not worth the risk to chance a misinterpretation of temporary importation regulations. They’re happy to buy the peace of mind that comes with full importation even though they might not need it. Still others would rather those dollars be invested elsewhere and will do the homework and make the connections required to get full benefit of the temporary importation regulations wherever they go. The choice can come down to your tolerance for risk.
Some Partial Clearing of The Fog
The European Union (EU) was asked by the International Business Aviation Council (IBAC) to help clarify the rules on importation. At issue was the confusion created by the fact that the EU is considered one customs territory, yet each of its 28 member nations is free to set its own regulations regarding importation. The result was this working paper issued in December of 2014. Despite its attempt to help clarify importation requirements, the paper itself is merely a guideline and nothing in the paper is regulatory or enforceable. The paper itself, along with more detail on the complex issue of importation can be found on the National Business Aviation Association’s (NBAA) website.
One final note, if trips to Australia are in your future, pay special attention to their importation regulations. The authorities in Australia are trying to be as transparent as possible about their importation standards, and they are strictly and diligently enforcing them.
Questions regarding importation are on the rise from owners/operators alike. Everyday, Jeppesen’s International Trip Planning Services (ITPS) team works with global operators and aircraft manufacturers to ensure that they have a thorough understanding of importation, flight plans are optimized to reduce importation’s impact and to help connect them with the proper authorities to ease the importation process. They can do the same for you. Learn more about Jeppesen ITPS by clicking here or calling (800) 553-7750.