Interlining

Created on 2nd of November 2005   Last Modified on the 17th of August 2010

Duty and tax-free sales may still be made on some intra-EU journeys, but only to passengers who are interlining (changing planes) at another EU airport for an onward journey to a destination outside the EU.

After the abolition of intra-EU duty and tax-free sales in July 1999, no such sales are permitted to passengers on journeys which are wholly within the EU. However, many passengers take connecting flights, particularly from regional airports, in order to interline at a major hub airport for a destination outside the EU, for example Newcastle to Bahrain via London. Because of the importance of duty-free sales revenue to such regional airports, the issue of the treatment of interlining passengers was raised with the Commission. In a letter in January 2001 to the Director of Italian Customs, the Commission confirmed that duty and tax-free sales could be made to travellers who were initially taking a connecting flight via another EU airport, provided that their final destination was outside the EU and that the travel could be considered as one continuous journey. The Commission left it up to each Member State to determine the conditions under which travel may be regarded as an uninterrupted third country journey. The criteria applied by HM Revenue and Customs are that the passenger must
(i) hold a single valid through ticket for the whole journey, and
(ii) depart the transiting airport within 5 hours of arrival. (Scheduled times of arrival and departure as printed on the ticket).

HM Revenue and Customs stipulate that duty-free sales may not be made to a passenger holding two separate tickets (for example Newcastle-London and London-Bahrain), as this is considered as two separate journeys, the first being a domestic one. HMRC rules on this are contained in paragraph 39.2 of Notice 197A which is available on the Export Shops page as a link.

The sale of duty-free goods to interlining passengers with a final destination outside the EU has now been confirmed in EU law. Article 14 of Council Directive 2008/118/EC, which came into force on 1 April 2010, provides that Member States may allow such sales to travellers leaving the EU and also includes a definition of eligibility.

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