What taxes are applicable if I buy a plane?

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crazyaviator
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Re: What taxes are applicable if I buy a plane?

Post by crazyaviator » Wed Oct 28, 2015 6:34 pm

the tc bill of sale format is for transfer purposes you need a second bill of sale showing the amount for revenue canada. the government mails you asking you what tax you are to pay after their computers are flagged with the registration transfer
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Re: What taxes are applicable if I buy a plane?

Post by AirFrame » Thu Oct 29, 2015 7:03 am

You could pull something creative like a local flying club did... Buy the airplane for a declared value of $5000. Separately, buy the avionics and interior for $30000.
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Re: What taxes are applicable if I buy a plane?

Post by Taiser » Thu Oct 29, 2015 7:38 am

No rhyme or reason. When I was building my STOL, I was told to keep every receipt because TC would ask for proof of taxes paid when I requested registration marks so I kept every one of them, and it's a lot of them!

I ordered my marks, got a letter saying "here ya go" and they did ask for the "kit" receipt but that was it. The kit receipt is a very small amount compared to the rest of the build. Never a mention of providing any other receipts... I guess they can still request them, but it's been almost a year now with no mention of them. Funny, because some guys have said they were asked for them and got burned when they couldn't find them all, basically got stuck paying tax TWICE!

If they ask me for them now I figure I can shove them all into a shoe box and tell them "enjoy"...
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Re: What taxes are applicable if I buy a plane?

Post by CpnCrunch » Thu Oct 29, 2015 8:17 am

AirFrame wrote:You could pull something creative like a local flying club did... Buy the airplane for a declared value of $5000. Separately, buy the avionics and interior for $30000.
They eventually had to pay the PST, or at least most of it, from what I can gather. They're also under new management now. The only result of their clever idea was a lot of backstabbing, made-up slander, a few people barred from the club (one for being a loony nutbar who had a tendency to harrass people, the other an innocent party), and loss of members/revenue. Clever idea, eh?
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Re: What taxes are applicable if I buy a plane?

Post by Kingeddie2.0 » Fri Oct 30, 2015 1:10 pm

When I bought my super cub in Ontario I received the following advice

From TC I recieved a template bill of sale that read for the sum of one dollar and other valuable considerations


From revenue Canada with respect to HST. One private individual to another private individual within the province of Ontario no HST
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Re: What taxes are applicable if I buy a plane?

Post by photofly » Sun Nov 01, 2015 9:32 am

No HST is correct. The tax individuals must pay in Ontario is called RST, at 13%.
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Re: What taxes are applicable if I buy a plane?

Post by digits_ » Fri Apr 13, 2018 6:19 am

Hi all,

found this old topic, but it still contains a lot of good info.

Just wondering what happens if you buy a plane in Ontario, and you live in Manitoba and the plane will be based in Manitoba. Do you pay taxes in Ontario, Manitoba, or both?

I could find this document: https://www.gov.mb.ca/finance/taxation/ ... ns/026.pdf
Upon delivery in MB, sales tax is due, but the plane won't be deliverd, I would be, hypothetically, picking it up in Ontario and flying it over myself, the sale would take place in Ontario.

As mentioned in this topic previously, Ontario already charges 13% tax. Double tax would be, ehm..., interesting.

Thanks
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Re: What taxes are applicable if I buy a plane?

Post by Cessna 180 » Fri Apr 13, 2018 7:42 pm

If you're smart you'll just use an Alberta mailing address or possibly an Alberta numbered company and pay no taxes (or only 5% GST on an import).
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Re: What taxes are applicable if I buy a plane?

Post by CpnCrunch » Fri Apr 13, 2018 8:09 pm

Cessna 180 wrote:
Fri Apr 13, 2018 7:42 pm
If you're smart you'll just use an Alberta mailing address or possibly an Alberta numbered company and pay no taxes (or only 5% GST on an import).
I'm pretty sure corporations are liable for PST on aircraft brought into BC as well as individuals, you just won't get a notice to pay. Not sure how it works in other provinces. I guess it depends whether or not you're ok with that.

The other issue is that it creates potential tax issues because you are personally liable to pay tax on the shareholder benefits unless you exclusively use the aircraft within the business. Lots of people ignore this, so again it just depends how comfortable you are with tax evasion. There are also the accounting fees to consider.
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Re: What taxes are applicable if I buy a plane?

Post by JasonE » Fri Apr 13, 2018 8:38 pm

You pay the appropriate tax only for the province you live in.
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Re: What taxes are applicable if I buy a plane?

Post by CpnCrunch » Fri Apr 13, 2018 9:05 pm

JasonE wrote:
Fri Apr 13, 2018 8:38 pm
You pay the appropriate tax only for the province you live in.
Not for BC. Non-residents have to pay PST if they bring tangible personal property (including aircraft) into the province.
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Re: What taxes are applicable if I buy a plane?

Post by SkySailor » Fri Apr 13, 2018 9:17 pm

Go to Ontario, hand over the bucks (this will be the beginning of MANY dollars leaving your possession), fly it to Manitoba, send in change of registration to Transport. Fly the aircraft and be quiet. You'll receive your new C of R shortly.

I've purchased 3 different Canadian registered aircraft in Ontario, and never received any notice of taxes, federal or provincial. It's not Transport's job to enforce tax legislation.

It's important to note all my purchases were private sales. If you're going through a dealer, they got ya.......
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Re: What taxes are applicable if I buy a plane?

Post by HiFlyChick » Sat Apr 14, 2018 4:43 am

ogopogo wrote:
Mon Oct 26, 2015 8:19 am
Buying an aircraft from: PST GST HST (NS, NL and NB only)
a private individual Yes No Yes
a GST registered business Yes Yes Yes
a foreign country Yes Yes Yes
Not sure with your above graph whether that no refers to the GST or to NL, but be careful that there'snot simply a misalignment in terms between you and the person answering your question. NS, NB, NL (and PEI too for that matter) are all HST provinces. Someone might state that they don;t pay GST or PST, but they just mean that we call it HST because it's harmonized - you still pay it, just under a different name and with slightly different rules. The HST rates are shown on the CRA's web site:
http://www.cra-arc.gc.ca/tx/bsnss/tpcs/ ... ng.html#rt

The Maritimes used to vary between 13 and 15%, but all are now at 15%. You'll notice that places like BC only show as 5%, which is the GST. That doesn't mean that you only pay 5% tax, but that it's the only claimable portion of the tax from a HST registrant's point of view. For example, if I walk into a shop in BC and buy something, I pay the total tax = GST + whatever their PST is, but when I get home to the Maritimes and claim back the tax, I can only claim the GST portion. If I have that item shipped here to me (at least for airplane parts' dealers, who are set up for buyers from all over), they will actually charge me the 15% HST and I will be able to claim the full amount back.

For a private sale, I would guess that you are paying the full amount with no way to recover anything.

And for the person who said that TC told them to write down $1 as the sale price, the reason they did that is to avoid collecting private information from you, it most definitely was not tax advice. They don't care what you paid, nor if you skip out on paying the tax, for that matter, any more than the CRA cares if your C of A has lapsed. That was how we did it recently on a sale of an aircraft between two incorporated companies when changing the registration of the aircraft - that's when TC says to put down $1 as the sale price. That has nothing to do with the tax. The only reason in that particular case that the buyer didn't pay the tax is that both companies signed a certain form as being tax registrants, meaning that one would have collected and submitted it, while the other would have claimed it and gotten it back. Since there was a net gain of 0 for the government, the two companies did not have to pass around the tax money, just the base price. Given the severity of warnings from the accountants about not being late filing this form, I would assume that in all other cases, the tax must be paid.
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Re: What taxes are applicable if I buy a plane?

Post by tps8903 » Sat Apr 14, 2018 6:29 am

cap41 wrote:
Mon Oct 26, 2015 5:23 am
I've bought 2 planes in Ontario privately. Did not have to pay tax. They were cheaper 25K. I was advised by TC that the bill of sale should show 1$. This is after submitting the proper receipts. I was never trying to deceive.
+1.

I bought a plane in Ontario in 2012 and sold it recently. I was never sent a bill for taxes. I kept money aside for it until I sold the plane recently. I was under the impression the tax man would eventually catch up to me, but never did.
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Re: What taxes are applicable if I buy a plane?

Post by Cessna 180 » Sat Apr 14, 2018 4:02 pm

CpnCrunch wrote:
Fri Apr 13, 2018 9:05 pm
JasonE wrote:
Fri Apr 13, 2018 8:38 pm
You pay the appropriate tax only for the province you live in.
Not for BC. Non-residents have to pay PST if they bring tangible personal property (including aircraft) into the province.
if you fly your airplane into BC as a non-resident you do not have to pay PST to the gov't. You would on the sale of fuel, oil, etc.

and of course its not entirely legal to use a out of province address to avoid the taxman, but its rather unlikely that you would be caught.

not that any of this constitutes legal advice.
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Re: What taxes are applicable if I buy a plane?

Post by CpnCrunch » Sat Apr 14, 2018 4:33 pm

Cessna 180 wrote:
Sat Apr 14, 2018 4:02 pm

if you fly your airplane into BC as a non-resident you do not have to pay PST to the gov't. You would on the sale of fuel, oil, etc.

and of course its not entirely legal to use a out of province address to avoid the taxman, but its rather unlikely that you would be caught.

not that any of this constitutes legal advice.
We're talking about importing a plane into BC, not just flying in for the day. If a non-resident imports a plane into BC, they have to pay the tax (there is an entire section in the Provincial Sales Tax Act on this, section 52).

If you have a way of legally avoiding the tax, I'd love to hear it.
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Re: What taxes are applicable if I buy a plane?

Post by Cessna 180 » Sat Apr 14, 2018 5:33 pm

CpnCrunch wrote:
Sat Apr 14, 2018 4:33 pm
Cessna 180 wrote:
Sat Apr 14, 2018 4:02 pm

if you fly your airplane into BC as a non-resident you do not have to pay PST to the gov't. You would on the sale of fuel, oil, etc.

and of course its not entirely legal to use a out of province address to avoid the taxman, but its rather unlikely that you would be caught.

not that any of this constitutes legal advice.
We're talking about importing a plane into BC, not just flying in for the day. If a non-resident imports a plane into BC, they have to pay the tax (there is an entire section in the Provincial Sales Tax Act on this, section 52).

If you have a way of legally avoiding the tax, I'd love to hear it.
I might be missing what you're saying, but why would a non-resident import a plane into BC? Only a resident would have to import a plane into BC (unless you're referring to clearing customs in BC when importing a plane from the US, where the CBSA assesses taxes based on your province of residence, not your port of entry).

If a BC resident imports a plane from say, Alberta, then of course they would be liable for BC PST.

Is there a legal way to save the taxes? Well yes and no. If the plane is owned by a non-resident corporation that has legitimate business activities outside the province and is based outside the province, then you'd be likely clear of PST. Then again, most people who try this just open an Alberta corporation which has no legitimate business purpose other than to own the airplane. If the taxman wanted, they could probably prove that the plane is actually owned by the BC resident and not the corporation. You'd then liable for taxes and penalties and fines.

Government's (especially the BC NDP) love taxes and they know how to find you!!
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Re: What taxes are applicable if I buy a plane?

Post by CpnCrunch » Sat Apr 14, 2018 6:51 pm

Cessna 180 wrote:
Sat Apr 14, 2018 5:33 pm
I might be missing what you're saying, but why would a non-resident import a plane into BC?
The usual reason would be a non-resident corporation basing a plane in BC.
Then again, most people who try this just open an Alberta corporation which has no legitimate business purpose other than to own the airplane. If the taxman wanted, they could probably prove that the plane is actually owned by the BC resident and not the corporation. You'd then liable for taxes and penalties and fines.

Government's (especially the BC NDP) love taxes and they know how to find you!!
Yes, exactly. At the moment they don't really seem to care, but if they wanted to it would be pretty easy for them to find out.
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Re: What taxes are applicable if I buy a plane?

Post by Bede » Sun Apr 15, 2018 1:28 pm

photofly wrote:
Mon Oct 26, 2015 7:20 am
cap41 wrote:I've bought 2 planes in Ontario privately. Did not have to pay tax. They were cheaper 25K. I was advised by TC that the bill of sale should show 1$. This is after submitting the proper receipts. I was never trying to deceive.
Did you get that advice from a government official in writing? I'm fairly sure that under-declaring the value of a sale with the intent to avoid tax due is an offence that carries a hefty prison sentence.
Easy there. You're confusing the bill of sale with the contract of sale. The bill of sale always states "$1 plus valuable consideration". There's nothing illegal about it- that's standard legal practice. The chain of the bills of sale is used to establish title (and is submitted to TC). The contract of sale sets the terms and conditions of the sale such as the price, logs, etc.

Example Bill of sale: http://www.ultralightnews.com/pilotslou ... ofsale.htm
Example Contract of sale: https://www.aopa.org/go-fly/aircraft-an ... -agreement
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Re: What taxes are applicable if I buy a plane?

Post by CpnCrunch » Sun Apr 15, 2018 2:26 pm

COPA's example bill of sale gives the full amount. Anyway, it isn't TC who is sending the bill for PST or HST...they don't care how much the plane was sold for. BC ministry of finance uses information in the aircraft registry to see which planes have changed ownership, and I'm sure they'll not be happy if it says $1.

Should you voluntarily tell them that you've purchased a plane if they neglect to ask you to pay the tax? Perhaps Ontario's bureaucracy is just very inefficient. Or maybe they expect you to self-declare. I've never had the pleasure of living in Ontario, so I don't know how things work there.
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Re: What taxes are applicable if I buy a plane?

Post by Bede » Sun Apr 15, 2018 3:01 pm

CpnCrunch wrote:
Sun Apr 15, 2018 2:26 pm
Should you voluntarily tell them that you've purchased a plane if they neglect to ask you to pay the tax? Perhaps Ontario's bureaucracy is just very inefficient. Or maybe they expect you to self-declare. I've never had the pleasure of living in Ontario, so I don't know how things work there.
I live in Ontario. I've owned 3 airplanes. I have never been sent a bill.
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Re: What taxes are applicable if I buy a plane?

Post by Bede » Sun Apr 15, 2018 3:02 pm

Chris M wrote:
Mon Oct 26, 2015 4:35 am
crazyaviator wrote:In the "good old days" it used to be just 1 of the 2 taxes due for private sales ( provincial tax) about 5-7% depending on the province,,, NOW, on a 20-50 year old plane that has been taxed at new, every time its sold, taxes on the service, parts, fuel oil etc makes me think we are living as slaves in a prison. WHY doesn't the people say enough is enough??
I've always thought this is the biggest scam going. One of my cars has had something like 6 owners and started at $50K. I bought it eventually for $5,000. So if every owner has paid tax on it when they registered how much has Ontario collected off my single car? $15K? 20? I'm waiting for the day that some asinine politician tries to figure out how to tax someone for buying an old couch on Kijiji.
This is alluding to a very good argument. GST/HST is a value added tax (see wikipedia). The purpose is that whenever value is added, there is a tax on the additional value. When something depreciates (any used good), there should be no tax added. If anything, you should be getting a tax refund.
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Re: What taxes are applicable if I buy a plane?

Post by photofly » Sun Apr 15, 2018 3:58 pm

Then since everything depreciates to zero if you wait long enough, the government would have to pay back all the tax it collected.
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Re: What taxes are applicable if I buy a plane?

Post by CpnCrunch » Sun Apr 15, 2018 4:04 pm

Bede wrote:
Sun Apr 15, 2018 3:01 pm


I live in Ontario. I've owned 3 airplanes. I have never been sent a bill.
Info here:

https://www.fin.gov.on.ca/en/tax/rst/

It looks like you're meant to self-declare (which clearly is a bit of a joke :)
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Re: What taxes are applicable if I buy a plane?

Post by flyboy_2 » Thu Jul 25, 2019 1:38 pm

RatherBeFlying wrote:
Sun Oct 25, 2015 8:40 pm
It sounds like you are in Ontario; so would be assessed for HST.

In Alberta, there's only GST which is applied only when buying from a GST registrant or from the US.

Moving to Alberta for a couple months or setting up an Alberta corporation to hold the aircraft gets you out of HST, RST...

Setting up an Alberta corporation costs a few hundred bucks, plus a bit over a hundred a year for annual report.

Once registered to a corporation, you can sell the corporation without triggering HST, RST...

I know a fine lady who handles the Alberta paperwork for several aircraft. PM if interested.
I would like the contact info for the fine lady in Alberta if you still have it. Thx.
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