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]
Excise Duties and Taxes Division
Place de Ville, Tower A, 20th Floor
320 Queen Street
Ottawa ON K1A 0L5
Case Number: 139851
February 23, 2012
Dear [Client]:
Subject:
EXCISE INTERPRETATION
[Application of the] Air [Travellers] Security Charge [to Private Aircrafts]
Thank you for your letter of November 1, 2011 concerning the application of the Air Travellers Service Charge (ATSC) to private aircrafts.
All legislative references are to the Air Travellers [...] [Security] Charge Act and the regulations therein, unless otherwise specified.
We understand that you are the owner of [...] [Aircraft A]. You stated that you are not a "designated air carrier" and you do not provide an air service that is publicly available for the transportation of passengers or goods.
You have hired a management company to manage and operate your aircraft in which case the air service is sold to a third party and is publicly available.
Interpretation Requested
You would like to know if the ATSC applies when you use the aircraft for personal use.
You would also like to know if the ATSC applies when the aircraft is used by the management company for commercial use.
Interpretation Given
Based on the information provided, the ATSC does not apply when the aircraft is used for personal use and operated under a Private Operator Certificate (POC).
However, the ATSC applies when the aircraft is operated by the management company.
The Air Travellers Security Charge Act (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 a charge.
The term "designated air carrier" is defined in the ATSCA to mean "an air carrier that is authorized by the Canadian Transportation Agency under Part II of the Canada Transportation Act (CTA) 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 "chargeable emplanement". Paragraphs (c) and (d) refer to special embarkations or embarkations made in prescribed circumstances.
The definition of "domestic service" and "international service" in the CTA refer both to an "air service".
"Air service" is defined under Part II of the CTA to mean "a service, provided by means of an aircraft, that is publicly available for the transportation of passengers or goods or both".
It is our understanding that the Canadian Transportation Agency only issues licences under Part II to carriers holding a commercial Air Operator Certificate (AOC) that provide air services publicly available and as such has no involvement with private operators.
As a result, private operators that hold a POC only do not meet the definition of a "designated air carrier" for purposes of the ATSCA and are therefore not subject to the ATSC.
However, a management company who sells charter services would operate under an AOC and therefore meet the definition of a 'designated air carrier", unless excluded under paragraph (c) or (d) of the definition of "chargeable emplanement". As a result, any air transportation service provided by the management company that includes a chargeable emplanement is subject to the ATSC.
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, regulations, 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) 957-4138.
Yours truly,
Nathalie Robitaille
Softwood Lumber and Other Taxes
Excise Duties and Taxes Division
Excise and GST/HST Rulings Directorate
UNCLASSIFIED
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