The Canadian Business Aviation Association on September 6 submitted comments expressing concerns about a Canada Revenue Agency’s (CRA) draft proposal extensively revising the formulas for determining the taxable value on personal use of business aircraft.
The CRA has proposed three different categories (depending on the circumstances of the individual and the flight) to assess the taxable benefit to individuals when they use a business aircraft for personal travel. Additionally, the CRA proposes that its revised policy be retroactive to any open audits, notices of objection or pending litigation.
After consulting its members, the CBAA said it rejects the application of the concept of a person who controls access and use of an aircraft as a gateway to taxpayer treatment for personal benefit valuations. The association also is against the proposed category three (applicable to individuals who control access to the aircraft) because it “overprices the value of the benefit received by the individual who controls access and use.” The application of this proposed policy on a retroactive basis is also a sticking point for the CBAA.
However, the association believes that the policies described in category one and two (partial and full use of an aircraft for personal purposes) may be “workable in principle,” but only without any requirement to determine who controls access and use of the aircraft as the gateway to this particular tax treatment.”
