All non-French airlines may benefit from the VAT exemption without limitation.
According to French VAT rules, the supply, modification, repair, maintenance, chartering and hiring of the aircrafts used by French and foreign airlines carrying out at least 80% of their traffic on international routes, are VAT exempt.
In principle, the airlines are liable to provide their suppliers with a certificate each year, testifying that they meet this 80% international test. However, for sake of simplification, the French tax authorities were publishing each year a couple of lists, based on data obtained from the French Head of the civil aviation, as follows:
- A list of the French airlines deemed to meet the 80% international traffic test
- A list of the non-French airlines deemed not to meet this test – all the other non-French airlines being deemed to meet the 80% international traffic test
The French tax administration has recently amended the guidelines relating to this VAT exemption rule (BOI-TVA-CHAMP-30-30-30-20) as well as corresponding Appendices (lists of French and non-French airlines), updating the list of French airlines deemed to meet the 80% international traffic test, and withdrawing the list of non-French airlines deemed not to meet this test. In their new version, the guidelines indicate that “all the non-French airlines” are now deemed to meet the 80% international traffic test.
This simplification is welcome. By experience, non-French airlines where often included in the list by lack of information regarding the flights carried out abroad at the level of the French administrations. However, consequences could be important since the suppliers were often reluctant to apply the VAT exemption – even in case of provision of a certificate by the listed airlines – and since the airlines were facing issues to recover French VAT.