Overview

The supply, importation, leasing and maintenance of qualifying aircraft are zero rated for VAT purposes throughout the European Union. This relief is enshrined in Article 148 of Directive 2006/112/EC and applicable to aircraft used by airlines operating for reward chiefly on international routes.

The UK became a highly advantageous jurisdiction for the importation of an aircraft which was treated as qualifying under the UK legislation - the importation of the aircraft would not be subject to VAT and the aircraft would then be in free circulation throughout the European Union. However, with effect from 1 January 2011, the definition of a qualifying aircraft in UK legislation was changed. 

This briefing gives the background to the the new UK legislation by asking what is an airline, what is meant by operating for reward, and what is an international route.

Click 'View Briefing' to read on.