Please note that the following document, although correct at the time of issue, may not represent the current position of the Agency. / Veuillez prendre note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'Agence.
Excise Taxes and Other Levies
Place de Ville, Tower A, 20th floor
320 Queen Street
Ottawa, ON K1A 0L5
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XXXXX
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Case Number: 115544
Attention: XXXXX
July 8, 2009
Subject:
EXCISE INTERPRETATION - Application of ATSC to owner's aircraft by designated air carrier
Dear XXXXX:
Thank you for your XXXXX concerning the application of the Air Travellers Security Charge Act (ATSCA).
All legislative references are to the ATSCA and the regulations therein, unless otherwise specified.
We understand that:
1. Many corporations and some individuals, who are not designated air carriers, own executive jets.
2. The owners will rent, or charter these aircraft to a designated air carrier for a nominal amount.
3. The designated air carrier will supply air crew, fuel, provisioning, dispatching, maintenance and all other property and services necessary to operate the aircraft.
4. The aircraft owner will pay fees for these services based on both the fixed and variable operating costs of the aircraft.
5. Under agreement, the owner of the aircraft may allow the designated air carrier to charter the aircraft for third-party use.
6. Any income from such chartering is used to offset the operating costs of the aircraft.
7. When the designated air carrier makes the aircraft available to third parties, the designated air carrier collects the Air Travellers Security Charge (ATSC) as required based on the number of individuals that embark at a listed airport on a particular emplanement.
Interpretation Requested
You would like to know if the ATSC applies when a designated air carrier uses the owner's own aircraft to carry the owner (individual) or employees of the aircraft owner, with an embarkation at a listed airport.
Interpretation Given
Based on the information provided, the ATSC applies when a designated air carrier uses the owner's own aircraft to carry himself or his employees on a flight from a listed airport.
Analysis
Subsection 11(1) of the ATSCA states 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."
Subsection 11(2) of the ATSCA states that "the charge in respect of the air transportation service is payable
(c) if no consideration is paid or payable for the service and no ticket is issued for the service, at the time of emplanement."
With some exceptions, a chargeable emplanement is defined in Section 2 of the ATSCA as an embarkation by an individual at a listed airport on an aircraft operated by a particular air carrier.
One exception is for air transportation by employees in the course of their employment. Based on the information provided, this particular exception does not apply to this case.
Subsection 14(1) of the ATSCA provides that every designated air carrier from whom all or part of an air transportation service is acquired by a person who is required by the ATSCA to pay a charge in respect of that service is required to collect the charge not later than the time the charge becomes payable by the person.
There is no exclusion under the ATSCA that would relieve the designated air carrier from its liability to collect and remit the ATSC where a commercially registered aircraft in their custody and control is used for private and/or personal purposes.
The foregoing comments represent our general views with respect to the subject matter of your request. These comments are not rulings and, in accordance with the guidelines set out in GST/HST Memorandum 1.4, Goods and Services Tax Rulings, do not bind the Canada Revenue Agency with respect to a particular situation. Future changes to the ATSCA, or our interpretative policy could affect this interpretation.
If you require clarification with respect to any of the issues discussed in this letter, please call me directly at (613) 954-4132.
Yours truly,
Joan Thompson
Rulings Officer
Excise Taxes and Other Levies
Excise & GST/HST Rulings Directorate
XXXXX
UNCLASSIFIED
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