How to work as a pilot in Canada and not pay income taxes

[Gilles Hudicourt]

I just had a wonderful idea. If, after carefully studying Canadian tax laws, it become confirmed that the foreign pilots who come to Canada on Temporary Work Permits to fly Canadian controlled aircraft do not have to declare revenue in Canada, it will be great news for all of us, for it will mean that we won't need to pay taxes either.

I'm fed up with all the income taxes and deductions we pay in this country and I'm certain you are too.

I plan to set up an airline crew contracting company in the Dominican Republic, a country which has a Tax Treaty with Canada.

http://www.treaty-accord.gc.ca/text-tex ... &id=102251

I'll call the company SCrews Canada (short for Sub-contracted Crews Canada).

Here is how to proceed.

1) Apply at Screws Canada with your valid type rating in hand and Screws Canada will provide you with a Dominican residency.
2) Quit your job in Canada. That will create a vacancy.
3) Screws Canada will then approach your ex-employer with a proposal to contract you out to them as a pilot.

Being already type rated on the aircraft, and being non-resident, they'll jump on it. You'll cost much less to them than you did when you were an employee. They will be tickled pink. Plus you wont need an LMO or work permit that can limit the time they can use you, because guess what? You are Canadian! So the contract will be for many years. This is why they will prefer you over those foreign contract pilots requiring LMOs and reciprocity and such foolishness. You wont need licence validations either. You have a TC licence!

Of course, because you will now be a contract pilot from another country, you will also get, in addition to your salary, a housing allowance, company supplied transport to and from the airport, and per-diem while you are at your ex-home base and wherever you fly. And of course, your salary will be net. SCrew Canada will collect a commission from the client (the Airline in Canada) for finding them such a wonderful employee.

Then you can jump seat back and forth between the DR and Canada using AT, CJ, WJ, AC or SW.

SCrews Canada, will collect the contract funds from the client and pay you your salary in a bank account to your name in the DR.

Why go to Dubai when you can live and work tax free while living in Sunny DR, just a short four hour flight from Eastern Canada and no jet lag ? SCrews Canada will even find you affordable beachfront property and English and French private schools for your children at very low prices.

SCrews Canada! The way of the future in pilot employment!

[ea306]

Brilliant !!
Sign me up!


Actually are there not some AirCanada pilots who have more or less done something similar? Not contracting ... But become non-resident by residing out of country and as a result only pay taxes for the portion of their flying that is within Canadian Airspace? I am not sure how they did it...but would love to know!

As a Quebec resident, think of the taxes you would save!

[PITA]

Great Idea - Don't get sick - oh and check out the private school fees before you sign up

PITA

[justwork]

Great Idea - Don't get sick - oh and check out the private school fees before you sign up

PITA

Foreign workers are provided with health insurance through the employer. Most over seas employers also pay for school. Win win

[CD]

Hasn't that already been sort of tried?

Canadian-Lawyers.ca: Ruling On Residency
Globe and Mail: Air Canada pilots, CRA spar over tax laws
Winnipeg Sun: Tax-evading Winnipeg pilot fined for claiming Calgary as home

[complexintentions]

lol Great post Gilles! Really helps illustrate the sheer absurdity of the situation with the LMO disgrace.

Oh, and PITA, expat health care and schooling is generally a lot better than the average in Canada. Experienced both, bought the t-shirt. Sheesh, Canadians will be telling themselves they have the greatest health care system even as the wheels are falling off. (Best friend: Canadian MD. Sister: Canadian RN. Ex-g/f: Canadian physiotherapist.) Don't try to tell me that Canadian healthcare is all sunshine and lollypops, I get an earful from the people on the front lines, all the time. It's a demographic timebomb.

[yycflyguy]

Some "third-world" countries I have lived in or worked in have better health care professionals (studied either in the US or UK) for cheaper than buying travel insurance or what I experienced in Canada. The Canadian system leaves much to be desired. The worst place to have an accident or get sick is the US.

There are many AC pilots who are on the non resident tax program living abroad... even those that have told me they estimate $10-15k per year savings on taxation for just living across the border in NY state.

[PITA]

Wooah there partener - I painted the Health care system as lolypops and roses. Talk about put words in my mouth - I did not say that however I will say that each and every province (it's a provincial responsibility BTW) is better than the DR.
I too have worked most of my adult life overseas some for large multi-national company's and some small companys - I've had my family there and expierenced the education system. I have been a non-resident at times and have been a resident working overseas - I have been both an employee and a contractor - so I'm not talking through my hat.
To make a long sotry short - If you guys want to move your family to the DR and enjoy the health benifits and the school system and commute to Canada hey fill your boots - don't let the door slam on your ass on the way out. And while your at it take your doctor best friend your ex girl friend and the physio with you. We'll be fine here with out you.

[Gear Up]

"How to work as a pilot in Canada and not pay income taxes"

Dude, if you can figure out how to do that legaly please let us know. Kudos to you for the idea but.......

[Gilles Hudicourt]

"How to work as a pilot in Canada and not pay income taxes"

Dude, if you can figure out how to do that legaly please let us know. Kudos to you for the idea but.......

I would love to take credit for this but I didn't' come up with the idea, Sunwing did. Their foreign pilots pay zero taxes. And its not on account of their nationality but because of how they are hired. Sunwing does not hire them directly but pays their foreign employer for their use. To do the same all we need to do is be employed overseas , live overseas and spend less than 182 days in Canada.

[goldenpilot]

Absolutely, you can work in Canada and get your taxes drastically reduced.

I looked into when I lived in Mexico and worked at Jazz. This was years ago, so my memory has faded and tax rules may've changed.

1) You have to sell EVERYTHING IN CANADA. rrsp's might be exempt. maybe. Leasing might be a way around owning things (cars, furniture etc).
2) You have to keep track of where you are physically flying. The part of your route that is over Canadian airspace is going to be taxed, anything outside of Canada is taxed where your residence is located. Many places in Caribbean have little or no income tax.
3) You need to see an accountant in Canada that knows the details. I went to an accountant recommended to me in square one in Mississauga.

Ill try to remember his name, this was 8 years ago when I did this.

4) I did hear directly from an Air Canada pilot that he separated from his wife, put everything in her name in order to keep his possessions and avoid paying income tax. He had a place in Caribbean somewhere. I've no idea of his name and I wouldn't recognize him in a line up.

You also better show trips back and forth to your new residence.

It's a BIG hassle and CRA will likely cause you pain, so hire an accountant!

goldenpilot

[Gilles Hudicourt]

You are correct in a way but in the cases you described the pilots were working for the airline and lived overseas. In the case I am talking about you would work for an overseas company with which the Canadian airline would have a contractual agreement to provide it with contract pilots. So Air Canada or Jazz would need to contract Dominican republic based SCrews Canada to provide it with contract pilots. The pilot lives in the DR works for a DR company and pays income taxes in the DR which has a treaty with Canada.

And now you can own a home in Canada a long as it is not available for your use (rented out)

[whipline]

I worked in the EU this summer but only paid Canadian tax. Is that alright with you Gilles?

[Gilles Hudicourt]

I worked in the EU this summer but only paid Canadian tax. Is that alright with you Gilles?

I did too last winter. But I was flying a Canadian registered aircraft for Air Transat, my regular employer.

[OPEC6-Heavy]

Gilles,
Incorrect

Their foreign pilots pay zero taxes.

Yes they pay taxes in their country of residence.

Gilles,
What about a Canadian flying the summer on a G-reg aircraft for TUI, only paid Canadian taxes with there regular employer. The Queen would have a fit.

[Gilles Hudicourt]

Guys lets leave it to the CRA to decide who needs to pay what. I'm just a dumb pilot.

[OPEC6-Heavy]

I completely agree with that statement.