The Canadian Business Aviation Association and the Canadian Owners and Pilots Association are protesting proposed tax changes that could cost private aircraft owners who own their planes in companies a lot in taxes. The Canada Revenue Agency wants to change the way it calculates the taxable benefit that results from the use of business aircraft for personal use. CRA used to assess the value of those flights as comparable to a business class ticket on a scheduled airline but it’s looking at three levels of tax depending on who is sitting in the seat.
If the seat is taken by the guest of an employee of the company that owns the plane, the business class assessment would apply, meaning the guest would have to add the value of a first class ticket to his or her income for the year. The second level is for an employee using the plane for a personal flight. CRA would value that at the same rate as if the employee had to charter an aircraft. The third level is of greatest concern for the groups. If the owner of the company that owns the airplane uses it for personal use, all operating and financing costs would have to be added to the owner’s personal income tax base on his or her proportional use of the aircraft for non-business purposes. A good explanation of the proposal is here.