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Commission starts proceedings against Isle of Man VAT treatment of aircraft

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The European Commission has begun infringement proceedings against the UK, sending a letter of formal notice concerning the Isle of Man’s ‘abusive VAT practices’ with regard to supplies and leasing of aircraft for private use. The UK has two months to respond to the Commission’s points.

The Commission states in its press release that supplies of aircraft meant expressly for private use, including leasing services, should not be exempt, as VAT is only deductible for business use.

The ‘paradise papers’ revealed widespread VAT evasion in the yacht and aviation sectors. The Commission has already targeted Cyprus, Malta and Greece in infringement proceedings and has just sent a letter of formal notice to Italy over its VAT treatment of the leasing of yachts.

The European Parliament TAX3 committee following up the paradise papers is due to visit the Isle of Man in November. See

Issue: 1421
Categories: News , VAT