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.
[Addressee]
Case Number 142432
June 1, 2012
Subject: Excise Interpretation
Clarification of Application of [Air Traveller’s Security Charge] (ATSC) Regarding Small Charter Operations
This […] [correspondence] is in response to your questions regarding small charter operations.
Example 1
1. A Canadian charter operates the following trip and simply invoices its customers (no ticket is issued)
2. Flight
a. Leg 1 [mm/dd/yyyy]: Montreal to Toronto ([#] passengers)
b. Leg 2 [mm/dd/yyyy]: Toronto to Ibiza, Spain (same [#] passengers)
Example 2
1. A small U.S. charter, an invoice is issued in the US by the charter and the service is acquired by the customers in the U.S.
2. The customers are usually U.S. residents.
3. Flight
a. Leg 1 [mm/dd/yyyy]: U.S. to Vancouver ([#] passengers)
b. Leg 2 [mm/dd/yyyy]: Vancouver to Calgary (same [#] passengers)
c. Leg 3 [mm/dd/yyyy]: Calgary to Edmonton (same [#] passengers)
d. Leg 4 [mm/dd/yyyy]: Edmonton to Saskatoon (same [#] passengers)
e. Leg 5 [mm/dd/yyyy]: Saskatoon to U.S. (same [#] passengers)
Legislative Provisions
Section 4 of the Air Travellers Security Charge Act (ATSCA) states:
“If no ticket is issued for all or part of a journey, and it is reasonable to consider that a ticket would ordinarily be issued by a person for the journey or for that part, as the case may be, such a ticket, is except for the purposes of paragraph 11(2)(c), deemed to have been issued by the person.”
Paragraph 11(2)(c) states:
“The charge in respect of the air transportation service is payable … if no consideration is paid or payable for the service and no ticket is issued for the service, at the time of emplanement.”
Section 2 states:
“Continuous journey” to be a journey of an individual for which one ticket is issued;
Subsection 13(2) states
“That if an air transportation service that begins in Canada is acquired outside of Canada by a person in the course of a charter operation, the service is deemed to have been acquired in Canada and not outside Canada.”
Subparagraph 12(2)(b) states:
“subject to subsection (3), if an air transportation service is acquired outside Canada, the amount of the charge in respect of the service is $12.71 for each chargeable emplanement by an individual on an aircraft used to transport the individual to a destination outside Canada but within the continental zone, to a maximum of $25.42, if the service does not include transportation outside the continental zone, and tax under subsection 165(1) of the Excise Tax Act is not required to be paid in respect of the service;”
Application of the ATSC
Example 1
Section 4 is the deeming provision that applies where no tickets have been issued for an individual’s journey. If no ticket is issued for a continuous journey, but would ordinarily be issued, this section deems the issuance of a ticket.
In Example 1 tickets are not issued. This happens often in charter arrangements. The same ATSC principles apply to both the charter flights and regularly scheduled flights.
The ATSC is payable at the time of emplanement if no ticket is issued for the service pursuant to paragraph 11(2)(c).
In Example 1 there are 2 chargeable emplanements, the first in Montreal and the second in Toronto with 1 stopover in Toronto. The ATSC charge would be the maximum of $25.91 ([# of passengers] x $25.91).
Example 2
In Example 2 as in Example 1, no tickets are issued. The tickets are deemed to be issued pursuant to section 4. The ATSC principles apply to charter flights and regularly scheduled flights.
Subsection 13(2) does not apply in Example 2. The air transportation begins in the US and not in Canada. The service cannot be deemed to be acquired in Canada. The service in this example is acquired outside Canada.
The ATSC will not apply to regularly scheduled wholly intra-Canada air transportation for a non-resident that is acquired outside of Canada. Legs 2-4 would be wholly intra-Canada air transportation and ATSC will not apply.
In Example 2 there is one chargeable emplanement, the emplanement in Saskatoon. The ATSC charge would be $12.71([# of passengers] x 12.71). […].
The foregoing comments represent our general views with respect to the fact situations presented. Proposed amendments to the ATSCA, if enacted, could have an effect on the […] [interpretation] provided herein.
[…].
Email this Content