Import duty / GST question
 

If you import an aircraft into Australia as a private owner and then re-export it at a later date can you get the duty / GST back on re-export?

Cheers,

David

Unfortunately no.

The only alternative you have is to register either yourself or a company as a business (get an ABN) and then register for GST. Then you can claim back the GST paid on any purchase (including maintenance, fuel etc)

But, you would then need to invoice yourself for flying the plane (at a market rate) and include GST in that rate. Whilst no money would change hands, each month you'd have to send the government a cheque for the GST 'collected'. And when you sell, you need to include GST on sale and return to the ATO (unless you're selling overseas).

It can be worthwhile - but you need to be prepared for some sticky questions should the ATO audit you. It's perfectly ok to fly PVT under this arrangement as you are not chartering the aircraft. If anyone asks, you are hiring the aircraft from yourself (rather than a flying school etc) and flying it.

UTR (not a lawyer or accountant)

I don't think that will fly Underneath The (ATO) Radar but we'll all visit you whilst you're doing time........... :}

I understand you can invest your self managed super in an aircraft that can be used to convey you to your place of employment, somewhat like a car, how this can be used to offset GST is beyond me. An accountants opinion would seem obvious and there are a few who post here as are people I know that have their aircraft self managed as part of their super. I'm thinking the GST could be written off as well as depreciation. But why would you buy one from overseas just now when the $ is around .70c. Buying an Australian aircraft second hand usually doesn't involve a GST unless the vendor has claimed it for his business. Interesting subject and worth talking about.

There are some more possibilities.

If the aircraft is imported temporarily, then the GST is paid as a bond and will be refundable.

It may be possible for an aircraft to be owned by an overseas based entity (with a Australian listed as operator). In which case the company does not pay GST in the first place (think Singapore, Delaware (USA) or maybe Malaysia). You will pay GST if that company has such a tax.

If you buy it in an operating company name or set up a company to own it, then the company will get a GST credit when it acquires the aircraft. When you sell it, its sold as an export sale with no gst.

On sale there is a profit or loss based on the price you get compared with the depreciated value on your books. This may make the GST look small.

<<It may be possible for an aircraft to be owned by an overseas based entity (with a Australian listed as operator). In which case the company does not pay GST in the first place (think Singapore, Delaware (USA) or maybe Malaysia). You will pay GST if that company has such a tax.>>

Interesting, so if you bring in an N-reg, which has to be owned by a US individual or a US company (probably registered in Delaware), and it stays on the N-reg then you may not have to pay Australian GST?

In this instance, I think it would be classed as a visiting aircraft, so no. It may (however) need to be re-exported annually.

We used to do this with Rally cars. The car would stay on German registration and once a year it would make a trip on a boat to NZ to get the customs entry. The car never left the boat, just went to NZ & back!

But, if memory serves me correctly, many of our airlines aircraft (Qantas / Virgin, etc) are owned by overseas based finance companies, but are registered in Australia with an Australian operator. CASA records CofA holders, not owners. They stopped recording owners some years ago. So, I think an overseas company could own a VH registered aircraft.

Treatment of GST for export sales is (incredibly) still covered only by a draft ruling. See here below. There is a specific section on aircraft.

GSTR 2001/D6 (Finalised) - Goods and services tax: Exports of goods (As at 29 August 2001)

You dont get the GST back when you reexport the aircraft if it was paid when the aircraft was originally imported. There are however at least 3 options:

If you are only going to be here a short time then you can temporarily import it. You have to lodge some guarantee with the ATO and then get that back when you leave. Usually the goods can be in Australia no longer that 12 months.

You can set up a business to import the Aircraft. You can then pay the GST and then claim it back as the cost of the Aircraft is a business expense. Is ever the business sells the aircraft GST will be payable then. Also the ATO take a dim view of having personal assets/activities set up as businesses and so expect some extra scrutiny if you go down this path.

You can pay the GST. But get good advice as the customs value can be a lot less than what you think that it is worth. For things like aircraft and boats there is a big difference between what the thing might sell for at a no reserve auction after 30 days of advertising vs what an owner might hold out for over a long period of advertising/negotiation. If you bought the aircraft a while ago then the value may be able to be justified as a lot lower than you expect.

Thanks, this is all very helpful. What a terrific resource this is.

If your aircraft is owned and operated by a business registered for GST, that business can reclaim the GST through the BAS.

However - read the fourth sentence above - if the business never makes a profit and pays tax, expect the ATO to come knocking on your door for the GST back, and possibly look as whether the business or you should be prosecuted for tax avoidance.

And to generate income and hopefully make profits and pay tax with the aircraft, you need an AOC. No AOC and either CASA or the ATO may take a lot of interest in your activities.

All these schemes are fancy and fanciful, but if you don't own a viable business that requires an aircraft in the genuine conduct of it's income generating activities, your cheapest and safest course of action is to pay the GST.

Two sayings come to mind:

1. If you want to make a small fortune in aviation, start with a big one.

2. If it flies , floats or f.....s; rent it but, don't buy it.

One of these should apply here.

Our last "private" aircraft was purchased through a company registered for GST, so we claimed the GST back. We put the aircraft on-line with the local aero club with a written contract.

We had an ATO audit and they were happy with the contract arrangement. No AOC required.

hiwaytohell. Yes, no AOC required, costs are tax deductible. A company operating an aircraft in the private category in the course of it's business would also be acceptable, although some years ago CASA viewed business use of aircraft as Aerial Work.