Universal Weather & Aviation (Booth No. 7030) is launching a new service to guarantee that fuel purchases in Europe are made at the correct rate of value added tax (VAT). The complimentary service, which started on May 1, should overcome the headaches commonly associated with calculating which VAT rate should apply based on an aircraft operator’s status. Initially, the service is being offered in nine core European countries: Austria, Belgium, France, Germany, Ireland, Italy, Spain, Switzerland and the UK. But the UVAir division intends to extend the service to other countries in the future through its new UVAir European Fueling Services subsidiary, based in Shannon, Ireland. Several other flight planning and fuel groups already provide a similar service.
VAT is applied at different rates throughout Europe and it often is complicated to work out which rate should apply, based on where operators are registered, where they operate from and where they are flying. “This system ensures that we can exempt clients from VAT if they are entitled and charge other clients at the correct rate, providing an accurate VAT invoice,” said Steve Woods, UVAir fuel manager for Europe, Africa, the Middle East and Australasia.
“In recent years, we have found that fuel suppliers, such as FBOs and oil companies, were making decisions on whether VAT should be charged on an uplift before billing the fuel to UVAir and did not distinguish tax-exempt operators, so it fell to UVair to check it,” Woods explained. “The VAT situation on fuel is very much open to interpretation in Europe.”
To join the program, operators have to fill out declaration forms to explain their status. The main questions to be resolved include whether the client is a commercial operator, whether it operates more than 50 percent of flights for reward on non-domestic legs and, if it is operating the flight for a private client, is the flight for business or leisure purposes. Quite simply, not all holders of commercial air operators’ certificates are exempt. Some companies can reclaim VAT if they have a valid VAT invoice, which UVAir can provide for the initial nine countries in which its new subsidiary is VAT-registered.
“We want to ensure that fuel suppliers are competing on the actual base price of fuel rather than [have it distorted by inconsistent] VAT rates,” concluded Woods. He conceded that it could be easier in terms of VAT administration for operators to buy fuel directly from oil companies but then they would lose the buying power that comes from being part of a network of around 17,500 UVAir card holders.