FRANCE Law and Practice Contributed by: Yves Hénaff d’Estrées, HENAFF D’ESTREES
1. Aircraft and Engine Purchase and Sale 1.1 Sales Agreements 1.1.1 Taxes/Duties Payable Upon Execution of the Sales Agreement The execution of an aircraft or engine sale agreement does not in itself create an obligation to pay a tax in France. As a general rule, value-added tax at the rate of 20% is invoiced to the buyer and is due from the seller of an aircraft physically located in France at the time of transfer of title. In some cases, however, an exemp - tion may apply, such as the exemption to the benefit of companies whose services to the destination of France or departing from France represent at least 80% of the services they operate. 1.1.2 Enforceability Against Domestic Parties The aircraft sale agreement does not need to be trans - lated, certified, notarised or legalised to be enforce - able against a domestic party. Translations are requested by the French courts. 1.2 Transfer of Ownership 1.2.1 Transferring Title Transfer of ownership of French-registered aircraft must be made in writing and registered with the air - craft register. The registration is proof of a valid title and includes all installed parts, such as an APU. There is no separate register for aircraft engines. The sale of ownership interest in an entity that owns an aircraft or engine will not effectively be recognised as a sale of such aircraft or engine itself, while the entity remains the owner. 1.2.2 Sales Governed by English or New York Law The transfer of title to an aircraft or engine physically delivered in France will be recognised if the bill of sale is governed by either English or New York law. The bill of sale must, however, include a complete description of the aircraft by which it can be identified, with the category, name of the manufacturer, type and
serial number, and it must clearly indicate full transfer of ownership in order to be recognised in France. 1.2.3 Enforceability Against Domestic Parties An aircraft bill of sale does not need to be translated, certified, notarised or legalised in order to be regis - tered and enforceable against a domestic party. 1.2.4 Registration, Filing and/or Consent From Government Entities The bill of sale of a French-registered aircraft needs to be filed with the aircraft register, together with all the documents required to register the new aircraft owner. The formalities for filing the transfer of ownership are fairly simple and may take only a few hours in urgent cases. The following applies: • the new owner/natural person must have French nationality or nationality of another European Union country or of a country member of the European Economic Area; or • the new owner/legal person must be constituted in accordance with the legislation of a member state of the European Union or of a country member of the European Economic Area, and must have its statutory office or main establishment in France or in another European Union country, or in a country member of the European Economic Area. In addition: • an aircraft may also be listed on the French register when it is operated by a carrier holding a French operating licence; • special exemptions may also be obtained upon request to the ministry in charge of civil aviation; • proof of payment of taxes, customs duties and an import licence is required when an aircraft is imported from outside the European Union; and • aircraft already registered on a foreign register require an official certificate of deregistration. 1.2.5 Taxes/Duties Payable Upon Execution of a Bill of Sale When title to an aircraft or engine is transferred while the aircraft or engine is located in France, even in transit, payment of a 20% French value-added tax
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