View Full Version : Korean vs Canadian
Tintin
10th Jul 2007, 06:42
Anyboby know about the tax agreement between korea and Canada as been cancel? Can anybody elaborate that a little??? And what are the route on the 330???
Tintin ...
A new Tax Convention between Canada and Korea went into force on December 18, 2006. The provision regarding taxation of income earned as pilot operating a Korean registered aircraft was changed to permit the income to be taxed in Canada if you are resident in Canada. The applicable section is as follows:
ARTICLE 15
Dependent Personal Services
...
3. Notwithstanding the preceding provisions of this Article, remuneration derived in respect of an employment exercised aboard a ship or aircraft operated in international traffic by an enterprise of a Contracting State shall be taxable only in that State unless the remuneration is derived by a resident of the other Contracting State.
http://www.treaty-accord.gc.ca/ViewTreaty.asp?Treaty_ID=105070
I read the new agreement very quickly, but I think the problem with that one is that you probably could not declare yourself a non-resident even if the time spent outside Canada exceeds 6 months.
Could be because you won't be able to provide Revenu Canada with an address in South Korea, simply because you will not have one, staying at the airport hotel. Othewise the canadian pilots would just stay with KAL, declaring themselves non-resident and collecting full contract money at the end of the month.
Too bad though, it will probably go for them from the best commuting contract around to a very bad one ($$$$).
Only guessing!
Obbie
14th Jul 2007, 18:01
I must not understand totally. I don't see what has changed.
It is a commuting contract, so you pay the tax rate of the country you
are resident in. I'm assuming they are commuting from Canada.
If you were resident in Canada for taxes, then you had to declare all income,
Canadian and over seas. And pay Canadian rates on all of it.
So how has anything changed ?
Obbie ...
The relevant section from the previous Tax Convention signed in 1979 read:
3. Notwithstanding the preceding provisions of this Article, remuneration in respect of an employment exercised aboard a ship or aircraft operated in international traffic by an enterprise of a Contracting State, shall be taxable only in that State.
The 13 words "unless the remuneration is derived by a resident of the other Contracting State" that they added in to the new convention make all the difference.
roughrider747
15th Jul 2007, 02:13
my take is you don't actually work for Korean, you work for an agency as an independant contractor, so you either are responsible for your own taxes or your agency provides you with an income tax statement for revenue canada, or am i missing something else here.
Your take is wrong.
The income is "remuneration in respect of an employment exercised aboard a ship or aircraft operated in international traffic by an enterprise of a Contracting State" and is taxed as such.
Until the end of this year no taxes are owing in Canada, after that the income becomes fully taxable.
ELAC,
I have not read the whole of the new agreement, but where can I find out that it will officially come into effect next January?
Have some canadians left or given their resignation notice already because of that?
That would confirm it.
The convention actually came into force on December 18th, 2006. However, from Article 28 Entry Into Force:
4. Notwithstanding the provisions of paragraph 2, where any greater relief from tax would have been afforded by the provisions of the 1978 Convention, any such provision as aforesaid shall continue to have effect for taxation years ending on or before the last day of the calendar year next following that in which the Convention enters into force. So, the provisions of Article 15 which will make the income taxable in Canada only take effect on Jan. 1, 2008.
As for Canadians leaving Korean, the march has already begun and a good deal more will be leaving when the right opportunity presents itself. Working at Korean for 40% less just isn't worth it.
vomit comet
18th Jul 2007, 11:40
hello gentlemen :E thinkin of joining korean preferrably on airbus fleet..can anyone tell me what to expect in the interview..thanks