Administrative Policy
16 June 2014 External T.I. 2013-0515431E5 - International traffic and airline enterprise
non-resident's provision of crew and aircraft to Canadian airline
During peak season, Canco, which transports passengers to destinations inside and outside Canada, is supplied planes and non-resident pilots and crew by an arm's length U.K. resident ("Forco") who is the pilots' and crew's employer, to transport Canco's passengers. In finding that Forco qualified under s. 81(1)(c) provided similar relief was provided in the U.K., CRA stated:
Forco could be viewed as earning income in Canada from the operation of an aircraft in international traffic within the meaning of paragraph 81(1)(c), notwithstanding that the tickets held by the passengers on its flights represent contracts for services between the passengers and Canco.