Please note that the following document, although correct at the time of issue, may not represent the current position of the Canada Revenue Agency. / Veuillez prendre note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'Agence du revenu du Canada.
DATE April 22, 2014
FROM: Neil Varan
Technical Policy Advisor
Excise Taxes and Other Levies
PdV Tower A, 20th Floor
TO: [Addressee]
CASE NUMBER: 161570
SUBJECT: EXCISE INTERPRETATION
Application of Air Travellers Security Charge
Thank you for your [correspondence] of [mm/dd/yyyy], concerning the application of the Air Travellers Security Charge (ATSC). In it, you sought clarification as to the applicability of the charge to a designated air carrier. The salient facts are as follows:
1. […][The Company] is engaged in the business of transporting individuals by air.
2. The service is both commercial and non-commercial.
3. When non-commercial, [the Company] is transporting the aircraft owners.
4. When commercial, the aircraft provide a publicly available air service to unrelated third parties.
5. [The Company] is authorized under Part II of the Canada Transportation Act to operate an air service.
6. [The Company] collected the ATSC from passengers on commercial flights, and remitted it to the CRA.
7. [The Company] did not collect the ATSC from passengers on non-commercial flights.
8. [The Company] […][believes] that when operating on behalf of the owners on non-commercial flights (i.e. not providing an air service to unrelated third parties), they are not a “designated air carrier” as defined in the Air Travellers Security Charge Act, and are therefore not required to remit the Air Travellers Security Charge in respect of those passengers.
All legislative references are to the Air Travellers Security Charge Act and the regulations therein, unless otherwise specified.
The Act defines “designated air carrier” as “an air carrier that is authorized by the Canadian Transportation Agency under Part II of the Canada Transportation Act to operate a domestic service or an international service, but does not include an air carrier that provides services that include only emplanements that are described in paragraph (c) or (d) of the definition of “chargeable emplanement””.
“Air carrier” is defined in the Act to mean “a person who carries on the business of transporting individuals by air.”
The definition of “chargeable emplanement” is “an embarkation by an individual at a listed airport on an aircraft operated by a particular air carrier, except if…
(c) the embarkation is (i) on an aircraft whose maximum certified take-off weight does not exceed 2 730 kg, (ii) on an aircraft referred to in subsection 56(1) of the Canada Transportation Act, (iii) in the course of a service listed in, or prescribed under, subsection 56(2) of the Canada Transportation Act, or (iv) in the course of an air ambulance service; or
(d) the embarkation is made in prescribed circumstances.”
In the instant case, neither section (c) nor section (d) of the definition of “chargeable emplanement” in the Act applies. As [the Company] is an air carrier authorized by the Canadian Transportation Agency under Part II of the Canadian Transportation Act, they meet the definition of “designated air carrier” under the Act.
Section 11(1) of the Act mandates that “Every person who acquires from a designated air carrier all or part of an air transportation service that includes a chargeable emplanement shall pay to Her Majesty a charge as determined under this Act in respect of the service.”
Accordingly, as [the Company] is a designated air carrier, it would be required to collect and remit the applicable Air Travellers Security Charge for the chargeable emplanements on behalf of passengers on its non-commercial flights.
[…].
If you require clarification with respect to any of the issues discussed in this letter, please call me directly at (613) 957-1140.
Yours truly,
Neil Varan
Excise Taxes and Other Levies Unit
Excise Duties and Taxes Division
Excise and GST/HST Rulings Directorate
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