Upon import, the aircraft are subject to customs clearance and payment of customs duties and taxes. Import duty rates with regard to the aircraft vary from 0% to 19.3% depending on the particular aircraft.

Under the WTO arrangements, Russia took on the obligations to decrease import duty rates with respect to the majority of goods, including aircraft. According to such obligations, the import duty rates will be decreased within the transition period on average from 18% to 10% by 2019.

Additionally, current customs legislation provides for customs duty exemption for the particular aircraft temporary imported into the Customs Union of Russia, Belarus and Kazakhstan (CU) provided certain requirements are met.

In 2014, the range of aircraft subject to such exemption was extended, in particular with respect to:

• Civil cargo aircraft not equipped with cargo ramp, with maximum take-off weight exceeding 60 000 kg but not exceeding 80 000 kg (classified under 8802 40 003 9 HS code) and those exceeding 370 000 kg (classified under 8802 40 009 6 HS code) imported before 31 December 2017;
• Passenger civil aircraft of a weight exceeding 20 000 but not exceeding 120 000 kg, with the number of seats 110-300, classified under the following HS codes - 8802 40 003 5, 8802 40 003 6, 8802 40 004 6, provided the certain requirements are met (e.g. imported before 1 January 2017);
• Passenger civil aircraft of a weight exceeding 120 000 kg, classified under 8802 40 009 1 HS code.

Currently, an additional exemption is being considered by the Customs Union regulatory authority –The Eurasian Economic Commission with respect to the following aircraft and their parts:

• Decrease of import duty rate on gas-turbine engines from 8% to 0% for a period of 2 years;
• Extend the list of the aircraft subject to full conditional exemption from customs duty upon temporary import of some civil passenger aircraft (with a seat capacity of 72 seats)
• Decrease import duty rate up to 0% with respect to particular aircraft components to facilitate local production.

KPMG will keep you updated regarding any further changes in this area and shall assist in any related matters.