What taxes are applicable if I buy a plane?

This forum has been developed to discuss aviation related topics.

Moderators: sky's the limit, sepia, Sulako, lilfssister, North Shore, I WAS Birddog

Taxivasion
Rank 3
Rank 3
Posts: 120
Joined: Wed Oct 15, 2014 10:23 am
Location: ysb

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

Post by Taxivasion »

photofly wrote:
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.
You're right, We should turn ourselves in. The Liberals need our money.
---------- ADS -----------
 
photofly
Top Poster
Top Poster
Posts: 11306
Joined: Tue Jan 18, 2011 4:47 pm
Location: Hangry and crankypated

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

Post by photofly »

Are you an income tax cheat too?
---------- ADS -----------
 
DId you hear the one about the jurisprudence fetishist? He got off on a technicality.
CpnCrunch
Rank 11
Rank 11
Posts: 4011
Joined: Mon Feb 08, 2010 9:38 am

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

Post by CpnCrunch »

Taxivasion wrote:
You're right, We should turn ourselves in. The Liberals need our money.
I think photofly's concern was more along the lines of you getting charged under the criminal code if they find out you deliberately undervalued the plane, rather than any concern about the government not taking enough of your money.

http://business.financialpost.com/perso ... ax-offence
http://www.kelowna.com/2009/09/03/kelow ... -tax-scam/
---------- ADS -----------
 
fleet16b
Rank (9)
Rank (9)
Posts: 1195
Joined: Mon Nov 03, 2008 11:49 am
Location: aerodrome of democracy

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

Post by fleet16b »

photofly wrote:what did you buy :-) ?
A 1928 designed Pietenpol Aircamper that was 90% completed
with an original Ford model A engine powering it

Previously I posted about flying one for a friend that has a very early one in his collection.
Well I fell in love with flying it and just had to have one
Doing a bit of digging I found one south of Nashville and bought it .
It was a project that was started by a retired NASA Engineer but unfortunately he passed away before he could finish it .
It will be very original to the 1928 era. I have already acquired the period original
Curtiss Jenny instruments and am now looking for Jenny spoke wheels
There will be absolutely nothing modern in this aircraft , not even an ELT
As I already own and fly another Antique airplane, There is no time frame for completion
I just have to find a place to do the work and am currently looking for a 1-2 car garage or corner odf a shop or heated hanger to rent in the Hamilton Ontario area
---------- ADS -----------
 
...isn't he the best pilot you've ever seen?....Yeah he is ....except when I'm shaving.........
cap41
Rank 4
Rank 4
Posts: 273
Joined: Thu Oct 04, 2012 7:36 pm
Location: Oshawa (CYOO)

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

Post by cap41 »

photofly wrote:
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.


I didn't under value anything! i simply filled out the provided TC example that already stated the price (1$). I not the smartest, but if I were under valuing a car or an airplane, i doubt I would drop it down that low!
---------- ADS -----------
 
crazyaviator
Rank 7
Rank 7
Posts: 671
Joined: Sun Oct 21, 2007 7:52 pm
Location: Ontario

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

Post by crazyaviator »

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
---------- ADS -----------
 
User avatar
AirFrame
Rank 10
Rank 10
Posts: 2610
Joined: Sun Oct 11, 2009 10:27 pm
Location: Sidney, BC
Contact:

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

Post by AirFrame »

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.
---------- ADS -----------
 
User avatar
Taiser
Rank 6
Rank 6
Posts: 403
Joined: Fri Mar 30, 2012 4:17 pm
Location: YQT
Contact:

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

Post by Taiser »

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"...
---------- ADS -----------
 
CpnCrunch
Rank 11
Rank 11
Posts: 4011
Joined: Mon Feb 08, 2010 9:38 am

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

Post by CpnCrunch »

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?
---------- ADS -----------
 
Kingeddie2.0
Rank 0
Rank 0
Posts: 6
Joined: Fri Jun 05, 2015 6:34 pm

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

Post by Kingeddie2.0 »

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
---------- ADS -----------
 
photofly
Top Poster
Top Poster
Posts: 11306
Joined: Tue Jan 18, 2011 4:47 pm
Location: Hangry and crankypated

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

Post by photofly »

No HST is correct. The tax individuals must pay in Ontario is called RST, at 13%.
---------- ADS -----------
 
DId you hear the one about the jurisprudence fetishist? He got off on a technicality.
digits_
Top Poster
Top Poster
Posts: 5931
Joined: Mon Feb 14, 2011 2:26 am

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

Post by digits_ »

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
---------- ADS -----------
 
As an AvCanada discussion grows longer:
-the probability of 'entitlement' being mentioned, approaches 1
-one will be accused of using bad airmanship
Cessna 180
Rank 7
Rank 7
Posts: 505
Joined: Wed Sep 23, 2015 8:28 pm
Location: YKF

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

Post by Cessna 180 »

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).
---------- ADS -----------
 
CpnCrunch
Rank 11
Rank 11
Posts: 4011
Joined: Mon Feb 08, 2010 9:38 am

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

Post by CpnCrunch »

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.
---------- ADS -----------
 
User avatar
JasonE
Rank 8
Rank 8
Posts: 837
Joined: Sat Sep 06, 2014 8:26 pm

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

Post by JasonE »

You pay the appropriate tax only for the province you live in.
---------- ADS -----------
 
"Carelessness and overconfidence are more dangerous than deliberately accepted risk." -Wilbur Wright
CpnCrunch
Rank 11
Rank 11
Posts: 4011
Joined: Mon Feb 08, 2010 9:38 am

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

Post by CpnCrunch »

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.
---------- ADS -----------
 
SkySailor
Rank 3
Rank 3
Posts: 133
Joined: Mon Jun 22, 2009 7:49 pm

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

Post by SkySailor »

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.......
---------- ADS -----------
 
User avatar
HiFlyChick
Rank 5
Rank 5
Posts: 386
Joined: Fri Aug 06, 2010 8:27 am

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

Post by HiFlyChick »

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.
---------- ADS -----------
 
tps8903
Rank 3
Rank 3
Posts: 191
Joined: Mon Jan 09, 2017 8:40 pm

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

Post by tps8903 »

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.
---------- ADS -----------
 
Cessna 180
Rank 7
Rank 7
Posts: 505
Joined: Wed Sep 23, 2015 8:28 pm
Location: YKF

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

Post by Cessna 180 »

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.
---------- ADS -----------
 
Post Reply

Return to “General Comments”