French VAT refund on aviation fuel

FRENCH VAT REFUND ON AVIATION FUEL

The principle of VAT exemption on Jet fuel

Aircraft companies operating internationally are entitled, under certain conditions, to purchase fuel in France VAT exempted.

Article 148 of the Principal EU VAT Directive:

Member States shall exempt the following transactions:
(e) the supply of goods for the fuelling and provisioning of aircraft used by airlines operating for reward chiefly on international routes

Eligibility of foreign airlines to VAT exemption in France

In order to take advantage of the French VAT exemption on jet fuel, foreign airlines must fulfil the specific qualifications under Article 148 (e) of the VAT Directive, which requires that at least 80% of the annual turnover is the result of operating for reward transportation of passengers or goods chiefly on international routes.

The threshold of eligibility is assessed on the basis of reports submitted by airlines to their parent ministry in the home country (The Ministry or Department of Transportation). Even if airlines not established in France are deemed to fulfill the turnover condition, each refueling company has its own policy regarding the documents requested to justify that the turnover’s threshold for international routes has been effectively reached.

As a consequence, many non-established airlines must still advance the payment of VAT on fuel purchase in France. Notwithstanding, the VAT principle of neutrality allows them to get the reimbursement of the sale tax incurred upstream when provisioning the aircrafts.

Recovering French Value Added Tax (VAT) on Jet fuel

Foreign airlines and aircraft operators incurring VAT in France are eligible to recover this tax by appointing a fiscal representative who will handle the French VAT reclaim process on their behalf.

French VAT can be recovered by airlines on the following goods and services: