GERMANY Law and Practice Contributed by: Konrad Schott, Jan Brinkmann and Johannes Vogel, Freshfields
Freshfields Bockenheimer Anlage 44 60322 Frankfurt am Main Germany
Tel: +49 6927 3080 Fax: +49 6923 2664 Email: konrad.schott@freshfields.com Web: www.freshfields.com
• includes any essential part ( wesentlicher Bestand- teil ) – ie, any part that cannot be removed without the destruction of either the aircraft or the relevant part; • extends to any non-essential component ( nicht wesentlicher Bestandteil ) which, in the parties’ understanding, forms part of the aircraft; and • comprises by way of rebuttable presumption any accessory ( Zubehör ). Non-essential components and accessories include engines, auxiliary power units or removable parts. There is no conclusive view on whether an engine constitutes a non-essential component or an acces - sory. Under German law, the sale of the ownership inter - est in an entity that owns an aircraft or engine is not recognised as a sale of such aircraft or engine itself. 1.2.2 Sales Governed by English or New York Law Under German conflict of law rules, the transfer of title to an aircraft registered in a national aircraft register of a member state of the International Civil Aviation Organization (ICAO) will generally be governed by the law of the jurisdiction of the registration of such air - craft (Article 45, paragraph 1 of the German Introduc - tory Code to the Civil Code (EGBGB)), unless there is – in exceptional cases – a substantially closer nexus to the laws of another jurisdiction, or if the laws of the jurisdiction of registration, in turn, refer to the laws of Germany (renvoi). The recognition of obligatory provi - sions in a bill of sale (eg, a title warranty) which are not related to the title transfer must be assessed indepen - dently. If the bill of sale is expressed to be governed by a law not applicable pursuant to the above, Ger -
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 itself (including the sale of an ownership interest in an entity owning an aircraft or engine) does not gener - ally result in taxation, irrespective of the location of the aircraft or engine and the seller’s domicile. Gen - erally, the transfer of ownership upon completion of the sale agreement is relevant for income tax and VAT purposes. 1.1.2 Enforceability Against Domestic Parties It is not necessary for an aircraft sale agreement to be translated, certified, notarised or apostilled/legalised to be enforceable against a domestic party. However, if legal proceedings are instigated before a German court, upon its request, foreign language documents must be translated into German to be admissible in evidence in such proceedings. More recently, certain German courts have introduced individual tribunals where proceedings can be held in English. 1.2 Transfer of Ownership 1.2.1 Transferring Title To transfer title, the owner must (i) declare that it trans - fers its title to the aircraft or engine and (ii) surrender possession thereof; the acquirer must declare that it accepts such title and must establish possession over the aircraft or engine. Transfer of title to an aircraft pursuant to German property law:
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