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Getting VAT-free and/or duty-free fuel on flights departing to another country

lionel wrote:

The second scenario was one where the customer him/herself picks up the good at your premises and tells you he is transporting it out of the country. Not when the seller ships himself.

Diverting somewhat from the thread subject (Avgas), within the EU a retail outlet selling directly to a customer on-premises must include and charge VAT regardless of what the customer says (“I’m transporting these goods outside the country”). The process is that the customer needs to present a form to departure customs at the border along with the original invoice and the goods. Customs then stamps the form confirming the goods left the country. At some later visit (since at that point in time one needs to continue across the border) the customer returns with the invoice and customs-stamped form to the original retail outlet which will refund the VAT. This is how it works every day for the millions of Swiss going into Germany to benefit from the much lower prices. Of course, if you only make one trip then it would be a hassle to re-enter Germany just to get the VAT refund. However since many people do this almost daily, each visit includes presentation of the stamped form from the previous visit.

If a seller ships directly to an address outside the EU customs union, then VAT is not added because the buyer is burdened with the duty/VAT of the destination country. If the shipment is within the EU the national VAT is always added. I’m quite sure this is also true if, for example, a seller in Germany ships to France.

LSZK, Switzerland

I flew on June 6th from Belgium to UK and refuelled at Liege EBLG. VAT was included in price and when I asked about removing it because flying to UK, the guy showed mi table clearly stating private flights pay both “Accises” and “TVA” (oil tax and VAT). However, when I flew back from UK (Blackpool EGNH) they didn’t calculate VAT on grounds of exporting fuel out of UK. Same principle is applied in Serbia and Bosnia, refuelling there is always tax-free.

BTW Jet A1 at EGNH (VAT free) is 1.62€ while at EBLG is 2.28€ (with VAT) – while it’s 1.88€ pre-VAT.

LDZA LDVA, Croatia

AFAIK, the EU doesn’t have a VAT exemption on the sale of fuel delivered in the tanks of a vehicle, just because the vehicle is leaving the EU. Same for an aircraft, a boat or a car.

Now, if you buy fuel, and export it commercially:

  • you are a business, and thus a VAT-taxable person
  • the VAT you pay on purchase of the fuel that you export is deductible in your VAT return (and can be reimbursed), just like any other goods
ELLX

We have various previous threads on this and AFAIK nobody knows which part of the (UK or any other country) VAT regs is being invoked to enable zero-VAT fillups in the UK for flights going abroad.

This is both before brexit and after brexit. It remains a mystery. It is certainly the case that

  • pre-brexit, a customer outside the UK has zero VAT charged
  • pre-brexit, a customer in the EU has zero VAT charged if he provides a valid EU VAT number
  • post-brexit, a customer anywhere outside the UK has zero VAT charged

but in all 3 cases the supplier needs/needed evidence that the customer is really where he says he is and not just living around the corner and claiming to have an address in Kathmandu. Perhaps in the case of an airport delivering fuel, the existence of a flight plan to Kathmandu is sufficient for this, but it doesn’t explain the 2nd case above where some UK airports would sell you zero-VAT fuel if you were flying to France and had no VAT number.

Posts moved to existing thread.

Administrator
Shoreham EGKA, United Kingdom

Peter wrote:

Perhaps in the case of an airport delivering fuel, the existence of a flight plan to Kathmandu is sufficient for this, but it doesn’t explain the 2nd case above where some UK airports would sell you zero-VAT fuel if you were flying to France and had no VAT number.

In Turkey they sealed my caps with customs seals after refuelling. It took me two years to get rid of the remains of glue without scratching the aircraft.

Last Edited by Emir at 13 Jun 08:25
LDZA LDVA, Croatia

but it doesn’t explain the 2nd case above where some UK airports would sell you zero-VAT fuel if you were flying to France and had no VAT number.

For Avgas are you referring to Sleap & Lydd? maybe they apply one provision where low VAT is charged if your MTOW is less than 3T it’s not zero VAT though

If it’s zero VAT, I would not be surprised if they make mistakes as they regularly operate AOC Avgas twin piston (e.g. Chieftain, Navajo) to LeTouquet with passengers but I expected a private pilot is liable to declare and pay VAT?

Maybe they just “apply exported fuel drawback” for you but that’s Duty not VAT as far as I know?

Anyway who cares

https://www.gov.uk/guidance/vat-on-fuel-and-power-notice-70119#oils

https://www.gov.uk/guidance/get-relief-for-mineral-oil-put-to-certain-uses-excise-notice-184a

Last Edited by Ibra at 13 Jun 09:15
Paris/Essex, France/UK, United Kingdom

I Think it’s to do with EU Acquisition rules.

Where a trader in one state makes a supply to a trader in another member state it can be supplied with a VAT rate of 0%, provided the supplier is satisfied that the goods will leave the first state.

I Think that what has been happening in the UK is that for commercial operations a VAT number is recorded (to prove that it was a VAT trader in another state that the goods were sold to) and an international flight plan was accepted as proof that the goods were being exported.

However I think that in a number of cases the airport refuller didn’t appreciate the subtilties of supplying to a VAT registered trader in another state vs supplying to an individual and they just put all exports at 0%.

Certainly when I asked one supplier a long time ago why I was being charged VAT on an international flight out of the UK when they didn’t charge me VAT the previous time, they said that they should have been applying VAT all along to non-commercial operations and that there had been a recent letter from HMRC reminding them of that and that there was a bit of a crackdown on the practice. A lot of airports in the UK started charging VAT on fuel on international flights around the same time. So I think HMRC did do a bit of a crackdown on it.

Since Brexit, now that most international flights are leaving the UK Customs area, that will bring a new twist. I’m not familiar with UK rules on that now.

EIWT Weston, Ireland

However I think that in a number of cases the airport refuller didn’t appreciate the subtilties of supplying to a VAT registered trader in another state vs supplying to an individual and they just put all exports at 0%.

I think it is simpler.

Pre-brexit, if one E Macron filled up at Lydd and gave a valid French VAT number, HMRC still needed clear evidence that the goods were being exported. Not just a French VAT number.

I have posted this further back above. With parcels for example, HMRC asks for shipper documents proving the goods were shipped to the address given.

Think about it. If a French VAT number was sufficient, anybody could go around the UK GA scene with a generated French VAT number (the algorithm is in the public domain) and get VAT-free fuel. File a FP if you need to and then cancel it.

Whatever the rules, it’s very risky for the airport, because under the UK HMRC rules it is the supplier who is “deemed to have collected” the VAT, so if he fails to collect it, HMRC can ask him to hand it over, while the customer has got away The airport is then liable for 20% of its total fuel sales on which they failed to charge VAT!

Post-brexit, I doubt the fuel VAT situation is affected, because IMHO the issue here has always been that HMRC always needed clear evidence of export.

This is digressing but a customer turning up at your office and saying he is from Kathmandu and can he buy this and that and have a zero VAT invoice, is the world’s second oldest profession

Administrator
Shoreham EGKA, United Kingdom

I thought I said that
I believe they are accepting a valid flight plan as evidence of exporting. The the difference what some supplier were not taking up was the difference between suppling to a VAT registered trader vs a private individual. For a private individual it didn’t make any difference if you were exporting it or not.

EIWT Weston, Ireland

Sometimes when I’m departing UK airports, going to the EU (Ireland), no VAT is being applied. Now I wonder how (or more accurately, whether) this interacts with the UK’s Duty Drawback at I think currently 38.2p/litre? It has been my custom to send a repayment application to HMRC every two years or so.

Bluebeard
EIKH, Ireland
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