PPRuNe Forums - Danish VAT on Aircraft

Dear all

The Danish VAT Act will NOT change by January 1st. Probably April 1st 2008!

NEW PROPOSAL:
Today Wednesday December 5th the Danish Tax Ministry submitted a VAT Act amendment before the Parliament. The amendment proposes that the text in the EU directive is adopted more or less directly with effect from - not earlier than the date when the law amendment has been approved and published in the Danish Law Publication - but maybe later as the final decision will be made by the Tax Minister.

MY GUESS is that this will probably be April 1st 2008 as they will probably not change the law in the middle of a VAT period.

This means business as usual for at least the next three months. Imports can be made in the buyers own name (An import is from outside the EU!) No buying and selling is needed unless the aircraft is already in the EU. For later deliveries please read on and do contact us for more information.

TWO EXEMPTIONS:
One exemption is that flight schools are allowed VAT-free deliveries of aircraft and equipment for 2 more years. Normally only Danish flight schools would be able to take advantage of this as flight schools in other member states are liable for VAT in their home state even if the aircraft is purchased in Denmark according to the 6th VAT directive however some states don't require companies to pay VAT, if VAT has been "paid" in another member state. If your flight school belong in such a state and need a new aircraft after the law changes please call me.

The other transitional rule - which is probably more interesting for our segment - is that aircraft we sell before the law change (the contract must be concluded before the law change) can be physically delivered in 2008 according to the "old" rules also after the law change. If anyone has a special interest in a specific aircraft - let us know and we will assess the possibilities to acquire that aircraft so that we can sell it in Denmark subject to the "old" rules.

We believe that aircraft can be delivered also in 2009 and later if we sell an aircraft before the law change and raise an invoice as that would make the sale subject to VAT when the invoice is raised and thus subject to the "old" rules regardless of the transitional rule.

The parliament will use January and February and probably most of March before a vote will take place. We still hope to have the legislation delayed for some time to make everyone able to accommodate the price changes etc. as this will have dramatic results for the entire Danish GA industry. Not only us. We will appear before the Tax Committee in the parliament some time in the New Year.

In the mean time I want to assure you that none of this has any effect on any sales or imports made in the past or in the foreseeable future. Only a law change as proposed can do this and that will not under any circumstance happen now. And it will ONLY have effect for the future.

We are still working on our back up plan. For now the best advice is to make decisions about aircraft purchases or sales within a couple of months – at least on paper. As mentioned above deliveries can be made later in Denmark if contracts or invoices are raised by us before the law changes. Imports in 2008 after the law change based on contracts concluded by other than Danish sellers might also be possible due to other rules in the Danish VAT Act. More later!

Don't hesitate to call me with any questions you may have.

EFT! THIS TEXT IS COPYRIGHTED!

Best regards
OPMAS

Lasse Rungholm
CEO, Lawyer, CPL MEIR
<[email protected]>