What taxes are applicable if I buy a plane?

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

Post by CpnCrunch »

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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Cessna 180
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Re: What taxes are applicable if I buy a plane?

Post by Cessna 180 »

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

Post by CpnCrunch »

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

Post by Bede »

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

Post by CpnCrunch »

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

Post by Bede »

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 »

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

Post by photofly »

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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DId you hear the one about the jurisprudence fetishist? He got off on a technicality.
CpnCrunch
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Re: What taxes are applicable if I buy a plane?

Post by CpnCrunch »

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 »

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

Post by RatherBeFlying »

Alberta Corporate Care Services
Donna Corrin
(403) 615-3010
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CpnCrunch
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Re: What taxes are applicable if I buy a plane?

Post by CpnCrunch »

RatherBeFlying wrote: Sat Jul 27, 2019 8:31 pm Alberta Corporate Care Services
Donna Corrin
(403) 615-3010
I was just about to ask what you do about deemed shareholder benefits, but I see I already asked that question last year and nobody seemed to have an answer. So I guess the answer is: bury your head in the sand and hope you never get a personal tax audit?

I was hoping there was a better answer as I'd like to avoid paying the PST myself, but so far nobody has actually come up with a legal scheme to do it other than paying for the removable avionics separately.
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Re: What taxes are applicable if I buy a plane?

Post by pelmet »

I thought that sales taxes were based on what province you base the aircraft, not where your residence is.
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