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Business aviation, registrations, taxation and holding companies
by Martin Kennaugh
ICM Aviation
11 April 2013
Baltic Business Aviation, Tallin, Estonia
Who are we?ICM Aviation is:
• Part of the ICM group of companies
• Based in the Isle of Man
• Organiser of the Isle of Man Aviation Conference
• Licensed by the Financial Supervision Commission of the Isle of Man
Martin Kennaugh:
• Manager of Aviation Services, ICM Aviation
• Work closely with tax and legal advisors representing our clients
ICM Aviation is a business name of Inter-Continental Management Limited which is licensed by the Financial Supervision Commission of the Isle of Man
VAT Solutions
This presentation does not contain everything you need to know about the subject of aircraft and VAT. However, it does introduce possible solutions.
• These solutions should not be employed by an aircraft that is mainly used for private personal flying
VAT liability and mitigation
• VAT liability may be triggered by purchase or import of an aircraft.
• In UK VAT on non qualifying aircraft is 20% of the value
• VAT may be mitigated by the use of an Isle of Man VAT registered company to purchase or import the aircraft into the EU
ICM Aviation is a business name of Inter-Continental Management Limited which is licensed by the Financial Supervision Commission of the Isle of Man
VAT registration
• VAT registration of a company is different from registering an aircraft with an aviation authority – please don’t confuse the two.
ICM Aviation is a business name of Inter-Continental Management Limited which is licensed by the Financial Supervision Commission of the Isle of Man
Why use an Isle of Man company?
• Isle of Man inside the EU for VAT and Duty
• Works to same VAT rules as UK – but willing to enter into dialogue with Isle of Man business before setup
• Will consider registering a company for VAT purposes if it owns one aircraft
• Corporation Tax 0%
ICM Aviation is a business name of Inter-Continental Management Limited which is licensed by the Financial Supervision Commission of the Isle of Man
Isle of Man Aircraft Leasing Company
• Either owns or leases in the aircraft and leases it on to other companies as its business
• Subject to 20% VAT on purchase or import
• Pays & reclaims this
• Impact on cashflow may be negated by use of a deferment account
• VAT may be applicable on leases – remember Use and Enjoyment
ICM Aviation is a business name of Inter-Continental Management Limited which is licensed by the Financial Supervision Commission of the Isle of Man
Isle of Man Airline Structure
• Either supplies the aircraft to a company which meets the VAT definition of an airline, or the Isle of Man company acts as an airline itself.
• Under this interpretation of the VAT rules the Isle of Man company could import or acquire the aircraft at 0% VAT
• VAT definition of an Airline (not the high street one)
ICM Aviation is a business name of Inter-Continental Management Limited which is licensed by the Financial Supervision Commission of the Isle of Man
Isle of Man Company
• It is the Isle of Man company that is responsible for the import and VAT status of the aircraft, not the operator
ICM Aviation is a business name of Inter-Continental Management Limited which is licensed by the Financial Supervision Commission of the Isle of Man
Customs Warehousing
• A means of bringing aircraft into the EU for sale or maintenance, without suffering the VAT
ICM Aviation is a business name of Inter-Continental Management Limited which is licensed by the Financial Supervision Commission of the Isle of Man
Contact details
With business partners throughout Europe and the rest of the world we can offer the expert advice and assistance that you need for any of your aviation requirements.
For further information:
Martin Kennaugh
Manager Aviation services, ICM Aviation
t: +44 (0)1624 682400
ICM Aviation is a business name of Inter-Continental Management Limited which is licensed by the Financial Supervision Commission of the Isle of Man
