Expat Air Canada pilots

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whipline
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Expat Air Canada pilots

#1 Post by whipline » Tue Jan 30, 2018 1:02 pm

I remember reading about a group of AC pilots living in the Bahamas who fought the CRA and won.

I’m wondering if anyone has any insight to the tax lawyers or accountants they use to track their flights over Canadian airspace. I recall finding a firm that tracked individual schedules and figured out your tax liability to Canada but I can’t seem to find it now.

Any info would be greatful.

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Noo
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Re: Expat Air Canada pilots

#2 Post by Noo » Tue Jan 30, 2018 4:47 pm

Flying over a country doesn't have any tax implications for that country. :lol: It's based on your residence.
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Re: Expat Air Canada pilots

#3 Post by whipline » Tue Jan 30, 2018 6:05 pm

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confusedalot
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Re: Expat Air Canada pilots

#4 Post by confusedalot » Tue Jan 30, 2018 8:04 pm

In my time, IF you spent less than six months in Canada, AND your primary residence was outside of Canada, AND you had no intention of permanently residing in Canada in the future, you were not liable for Canadian tax. You could even have a secondary residence in Canada, once again, as long as you did not spend more than six months in it (something like a vacation home...)

Or course, you also need to give up your medicare card, have no bank accounts in Canada, not be married to a Canadian resident, etc....

Working for a Canadian based operator and showing up for work in Canada however strikes me as playing with fire. But hey, if you are only spending 100 hours in Canada, well, i guess it is winnable.
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Re: Expat Air Canada pilots

#5 Post by Victory » Tue Jan 30, 2018 8:59 pm

Only Canada would tax you for flying over it. Hahaha.
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Re: Expat Air Canada pilots

#6 Post by Stinky » Wed Jan 31, 2018 12:31 am

They changed the law in 2013 to simplify.

Non-Resident Employed as Aircraft Pilot

ITA
115(3)

Section 115 of the Act contains rules that determine a non-resident person’s taxable income earned in Canada, which is subject to tax in Canada under Part I of the Act. This determination is generally a question of fact and it is particularly difficult in the context of a non-resident aircraft pilot who is employed by a Canadian airline and who flies international flights.

The Act does not contain specific rules for determining what portion of a non-resident pilot’s income is attributable to duties performed in Canada (and is, therefore, part of the non-resident’s taxable income earned in Canada). There have been judicial decisions on the determination of income attributable to duties performed in Canada by a non-resident aircraft pilot (see Sutcliffe v. The Queen, 2006 TCC 812 and Price v. The Queen, 2011 TCC 449) and the methods used in those decisions for income attribution have been highly complex. This complexity has been criticized by the Tax Court of Canada.

In order to simplify the determination of taxable income earned in Canada and to provide greater certainty to taxpayers, new subsection 115(3) introduces rules for determining the Canadian source income of a non-resident aircraft pilot who is employed by a Canadian airline. For the purposes of subsection 115(1), the following income of a non-resident employed as a pilot, if it is paid directly or indirectly by a person resident in Canada, will be considered to be income from the duties of an office or employment performed in Canada:

all of the non-resident pilot’s income attributable to a flight that departs from a location in Canada and arrives at a location in Canada;
half of the non-resident pilot’s income attributable to a flight that departs from a location in Canada and arrives at a location outside Canada;
half of the non-resident pilot’s income attributable to a flight that departs from a location outside Canada and arrives at a location in Canada; and
none of the non-resident pilot’s income attributable to a flight that departs from a location outside Canada and arrives at a location outside Canada.
For these purposes, a flight will include any portion of a flight that involves a take-off and landing (i.e., each leg of a flight is considered a flight). Income that is not attributable to any specific flight will continue to be considered Canadian source if the income is received for services performed in Canada.

This amendment applies to the 2013 and subsequent taxation years.
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Re: Expat Air Canada pilots

#7 Post by whipline » Sat Feb 03, 2018 2:34 pm

Thanks for the response Stinky. Looks like it still may be worth it.
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Re: Expat Air Canada pilots

#8 Post by mijbil » Thu Feb 08, 2018 6:45 am

A friend who's dad who was at AC lived in BVI and would only pay tax on the portion of the flight flown in Cdn Domestic Airspace. After that it was tax free. Looks like they have changed the rule a bit to up the percentage that you pay - I read 50% - for an international out and back. I guess CRA needs more baksheesh to pay for Justin's pet projects - because it's 2018 and the well is dry, but I digress.
A friend working in Saudi uses a Toronto company called Trowbridge as a shield between him and CRA. They got back to me within a few days. I haven't left Canada for tax purposes - yet - but am working on it. As Confusedalot notes, there is a CRA test of sorts to determine residency. Trowbridge can likely help with that or you can delve into the CRA rules themselves if you have the time and inclination.
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