For Government Operators

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Scope of NATO VAT Exemption

The EU Principal VAT Directive applicable to all EU Member States provides for VAT exemption on supplies of goods and services to NATO military forces and their civilian staff from States other than the State where the supply takes place.  Thus, jet fuel purchased by the French Air Force at Évreux – Fauville BA 105 would attract French VAT.

The "NATO" VAT exemption also extends to supplies of goods and services from one EU Member State to another when the goods or services are for the use of any NATO force other than that of the State where the goods and services are delivered.  Thus, a delivery of spare parts from a French manufacturer to the US Air Force at Ramstein Air Base in Germany would be VAT-exempt, but a similar supply to the German Air Force at Ramstein could attract French VAT.

When EU VAT is charged in error to a NATO military, retroactive relief covering up to four years may be available.

 
VAT Exemption for Diplomatic and Consular Supplies

The Principal VAT Directive provides VAT exemption for supplies of  goods and services “under diplomatic and consular arrangements”.  Most diplomatic facilities such as embassies and consulates are aware of VAT exemption opportunities for local costs of operating and maintaining their facilities and local ground transportation.  However, these same provisions can apply to fuel and handling costs of aircraft operating on diplomatic and consular missions.

Although there is no separate ICAO flight plan classification for diplomatic/consular flights, unlike the “IM” designation for military, these flights will probably be identified in ICAO flight plans beginning with “IX” and with Box 18 STATE designations.  This information and local arrangements with the host government should be conveyed to your suppliers in advance to confirm eligibility for the diplomatic/consular VAT exemption.

When EU VAT is charged in error to consular or diplomatic missions, retroactive relief covering up to four years may be available.

 

 
Special Refund Reporting for Government Operators

For all tax refunds, VATAmerica sends Notices of Refund including specialized reports detailing the cash distribution subtotaled by the tail number of the aircraft that incurred the tax. These reports facilitate appropriate accounting treatment. As requested, VATAmerica can deliver customized reporting to match your internal accounting needs.

VATAmerica's European Tax Recovery and Exemption programs help hundreds of general aviation and other operators to minimize their European indirect tax costs.

December 2020

How much is MOT?
In countries applying their fuel excise taxes to jet fuel, European fuel excise tax rates vary between approximately €303 (Bulgaria) and €654.50 (Germany) per hundred litres, and this excise tax is then subject to local VAT as well.  Thus, the overall burden in Bulgaria is about US$ 1.60 / USG, and about US$ 3.45 / USG in Germany.
And Government operators are exempt from these charges?
Generally, yes.  The best way to avoid these taxes is in advance, with your supplier being aware of your governmental status and your fuel order indicating such status. Your ICAO flight plan identifier should begin with “IM” (military) or “IX” (consular/diplomatic/head of state/other).  Unlike VAT exemption that applies only to NATO military and consular or diplomatic flights, the “government” MOT exemption applies to all government aircraft operating in their official capacity.
We are a government operator and have been charged European jet fuel excise taxes.  Are these taxes recoverable?
It depends.  If you have identified the incorrect MOT charge within a few days after the month in which the uplift occurred, it may be possible to seek adjustment from your fuel supplier.

But if the error is discovered after the supplier files its monthly MOT return and pays over the tax to the local Customs authority, such adjustments are normally not available.  Rather, recoveries would be available only in countries granting refunds of incorrectly charged MOT.  The best countries for this purpose are Austria, Germany and France.
If seeking a refund of incorrect MOT, do we need to supply "original" MOT invoices to VATAmerica?
No.
We purchase fuel in Europe through direct accounts with local suppliers as well as through our accounts at various intermediary suppliers.  What documentation is required for MOT refunds?
For many direct suppliers, like Total and AirBP, we can access your online invoicing system to retrieve the necessary invoicing. For participating intermediary suppliers, we have arranged to obtain the necessary invoicing directly from their electronic invoicing systems for you.  Depending on the nature of your operations and the country in which the incorrect MOT is charged, additional documentation concerning your aircraft and your operations must be submitted with MOT refund applications.

 
Special MOT Refund Reporting for Government Operators

For all tax refunds, VATAmerica sends Notices of Refund including specialized reports detailing the cash distribution subtotaled by the tail number of the aircraft that incurred the tax.  These reports facilitate appropriate accounting treatment.  As requested, VATAmerica can deliver customized reporting to match your internal accounting needs.

VATAmerica's European Tax Recovery and Exemption programs help hundreds of general aviation and other operators to minimize their European indirect tax costs.

December 2020