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Corporate Aircraft Operators Stung For Canadian Taxes

by Mike Godfrey, Tax-News.com, Washington

17 September 2008


It has emerged that corporate aircraft operators in the US are paying the price for a decision by the Canadian Revenue Authority to assess Canada's privately-owned air traffic controller NAV Canada for back taxes.

More than 3,500 corporate aircraft operators who have recently flown into Canada have received bills from NAV Canada ranging from $25 to as much as $30,000 as the company seeks to recoup tax that the Revenue Agency says it should have collected on its services.

According to a ruling by the tax department, NAV Canada should have been collecting goods and services tax (GST) from non-resident corporate aircraft since 2003, but it had failed to do so. NAV Canada had mistakenly believed that, like commercial operators, corporates were exempt from the tax.

NAV Canada was subsequently landed with a bill for CAD1.9mn (USD1.77mn), which it is effectively passing on to corporate operators who flew to Canada during the last five years.

The rate of federal GST in Canada is currently 5%, having been reduced from 6% as of January 1, 2008, and from 7% the previous year.


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