Program Guides
For Corporate Flight Departments
European VAT Refunding and Exemptions on Jet Fuel
Are you confident that your European Tax Recovery Program recovers or eliminates VAT for your corporate flight department on jet fuel and other aircraft operating costs?
VAT Refunding
When VAT is correctly charged, the European VAT refund mechanisms generally allow refunds to corporate flight departments based in or outside of Europe.
Company flight departments based within the EU are able to recover VAT incurred throughout the EU plus in Norway and Switzerland.
For companies based outside the EU, VAT incurred on jet fuel is generally refundable in:
Belgium
Denmark
Finland
France
Ireland
Luxembourg
Netherlands
Norway
Switzerland
Non-EU flight departments are barred from VAT refunds in all 20 other EU States under the "reciprocity" rule. Also, Germany does not refund VAT on jet fuel to non-EU companies.
Special VAT Exemptions
Three countries – the UK, Italy and Spain – offer special VAT exemptions on jet fuel for corporate flight operations and other business operators.
The UK rule, applicable to fuel suppliers which are VAT-registered in the UK, applies the “zero rate”, meaning a VAT rate of 0%, to jet fuel purchased by business companies for a flight that “eventually” departs the UK. In order to “zero rate” jet fuel, most local fuel suppliers require evidence of the purchaser’s “business” status in the form of a copy of a certificate issued by the aircraft home country’s tax authorities certifying the purchaser’s business status.
US companies typically document their business stats by providing suppliers a copy of their US IRS Form 6166, “Tax Residency Certificate”. Other companies supply a copy of their VAT or GST registration certificate issued by their local tax authorities. Alternatively, many fuel suppliers obtain annual “Tax Declarations” to support the customer’s business status.
The Italian exemption applies for business flights that are departing Italy for a non-EU destination. The Spanish exemption applies to non-Spain based suppliers selling fuel to a flight that is immediately departing Spain. Documentation of business status for the Italian and Spanish rules is similar to the documentation used to support the UK exemption above.
VAT that is incorrectly charged in the UK, Spain and Italy when these special exemptions applied can not be recovered by the normal VAT refund rules because the tax charge is “incorrect”. In these cases, seeking credit/rebills from the fuel supplier is necessary.
Special VAT Refund Reporting
For all tax refunds, VATAmerica sends Notices of Refund including specialized reports detailing the cash distribution subtotaled by the tail number of the aircraft that incurred the tax. These reports facilitate customer account credits in appropriate cases, promoting customer awareness of the management company’s attention to cost management.
VATAmerica’s European Tax Recovery and Exemption programs help hundreds of general aviation and other operators to minimize their European indirect tax costs.
November 2024
