Canada To Raise Tax Value on Personal Use of Aircraft

 - August 21, 2017, 12:24 PM

The Canada Revenue Agency (CRA) has proposed an increase in the taxable value and stringency for calculating the financial benefits of the personal use of business aircraft owned or leased by a corporation. Since early last year, the Canadian Business Aviation Association (CBAA) has been warning that the CRA was reviewing its long-time policy of how to calculate taxable income from personal use of business aircraft.

Under the proposed policy, taxation levels of personal use would be divided into three categories: an employee who brings a spouse on a business trip on the aircraft, when the spouse is not supporting the business activities of the corporation; an employee who uses the aircraft entirely for a personal trip with people of his or her choosing on board; and a person who controls access to the aircraft and is providing that flight for the personal benefit of other employees or officers of the corporation.

The CRA stated that application of this proposed administrative policy will be retroactive and be applied to any open audits, notices of objection or pending litigation. Files already closed by the CRA will remain closed and will not be subject to this administrative policy. Comments are due today.