The basings fiasco
Join Date: Nov 2007
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Nice to see a link to some source data instead of conjecture (which we don't see often in this forum, source data I mean).
Regarding the requirement for work visas, and "who do Canadian based pilots actually work for", the AOA Canada newsletter update of 2 Jan 2011 provides info.
Regarding the requirement for work visas, and "who do Canadian based pilots actually work for", the AOA Canada newsletter update of 2 Jan 2011 provides info.
As has been said, Swire has taken this mess out of CX’s and the basings office hands. A little birdie has informed me that Swire has already unofficially tested the waters with the US authorities and the response wasn’t what they were wanting to hear.
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Even though CX Canada is a HKG entity, the Canadian authorities rejected CX's application for foreign employer status. Hence the decision that CX has to pay the employer portion of the Canada Pension Plan and Employment Insurance contributions. Also the CRA, in one of their latest communications, clearly states that CX Canada is considered a Canadian employer. However, the HKIRD has a different opinion in terms of taxes.
As such and as far as I know all Canadian laws and regulations apply to CX Canada and it's employees (the pilots) equally as to any other Canadian employer. The fact that CX Canada was setup as a HKG entity does not make it a foreign employer.
As such and as far as I know all Canadian laws and regulations apply to CX Canada and it's employees (the pilots) equally as to any other Canadian employer. The fact that CX Canada was setup as a HKG entity does not make it a foreign employer.
USAB
The obvious answer is read the law.
USAB does not even qualify as a US base. It is a hong kong company, the crews are employed and paid in hong kong just as they were before they left for either canada or the usa 'base'.
The 'resident for tax purposes' in the USA is defined as 183 days in country ..counting all the current calendar year,1/3 of the previous year and 1/6 of the year before that..add it up and no matter what visa one holds ..if you bust 183 you are tax resident....EXCEPT
the days spent in the USA having entered on a crewmans landing permit(C1/D visa) count for ZERO when accumulating aforementioned days.
The permit allows 29 days on EACH entry.
So green card or not...any foreigner entering as an international flag carrier crewmember is exempt from tax.
CX can call a base anything they want..the FACT is the 'base' is not legally qualified...i.e one may as well be working for cx in hong kong as essentially the same conditions apply.The fact you start and end a flight cycle in the USA is irrelevent and no current law covers it.
Additionally they've ballsed up witholding tax for USAB...
Currently tax is witheld for 'flying in usa airspace' but to invoke this rule more than 50% of total wages must be derived in the USA.
So ...my advice to all concerned..simply read the law.
USAB does not even qualify as a US base. It is a hong kong company, the crews are employed and paid in hong kong just as they were before they left for either canada or the usa 'base'.
The 'resident for tax purposes' in the USA is defined as 183 days in country ..counting all the current calendar year,1/3 of the previous year and 1/6 of the year before that..add it up and no matter what visa one holds ..if you bust 183 you are tax resident....EXCEPT
the days spent in the USA having entered on a crewmans landing permit(C1/D visa) count for ZERO when accumulating aforementioned days.
The permit allows 29 days on EACH entry.
So green card or not...any foreigner entering as an international flag carrier crewmember is exempt from tax.
CX can call a base anything they want..the FACT is the 'base' is not legally qualified...i.e one may as well be working for cx in hong kong as essentially the same conditions apply.The fact you start and end a flight cycle in the USA is irrelevent and no current law covers it.
Additionally they've ballsed up witholding tax for USAB...
Currently tax is witheld for 'flying in usa airspace' but to invoke this rule more than 50% of total wages must be derived in the USA.
So ...my advice to all concerned..simply read the law.
Word on the street is that CX are currently doing a feasibility study to determine if it's more economical to close the Oz base as opposed to keeping it open.
The ATO most probably want CX to pay many years of back-dated payroll tax for crew based in Australia, when CX didn't declare them.
This would explain why there are very few Oz bases available in the current pool.
This on-shoring is beginning to bite.
Only time will tell....
The ATO most probably want CX to pay many years of back-dated payroll tax for crew based in Australia, when CX didn't declare them.
This would explain why there are very few Oz bases available in the current pool.
This on-shoring is beginning to bite.
Only time will tell....
Giuseppe Giovanni
What a load of sh*t. As an account in my previous life closing the OZ bases doesn’t absolve CX from its tax liabilities and penalties to the ATO for past omissions and indiscretions. The cost to CX will be exactly the same either way.
What a load of sh*t. As an account in my previous life closing the OZ bases doesn’t absolve CX from its tax liabilities and penalties to the ATO for past omissions and indiscretions. The cost to CX will be exactly the same either way.
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GTC 58 has hit the nail on the head, not only in respect of Canada but also Europe. There never was a need to onshore. The original basings system, where you operated in and out of your preferred port was within the law and onshoring dropped an unecessary can of worms into the lap of a badly advised CX management.
I hope Swire understand this better than CX FOPS did when they set up the whole mess.
HKIRD do not recognise CX basing companies and will be sniffing around for the tax that they should rightfully have been paid before onshoring took place.
I hope Swire understand this better than CX FOPS did when they set up the whole mess.
HKIRD do not recognise CX basing companies and will be sniffing around for the tax that they should rightfully have been paid before onshoring took place.
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USAB
The obvious answer is read the law.
USAB does not even qualify as a US base. It is a hong kong company, the crews are employed and paid in hong kong just as they were before they left for either canada or the usa 'base'.
The 'resident for tax purposes' in the USA is defined as 183 days in country ..counting all the current calendar year,1/3 of the previous year and 1/6 of the year before that..add it up and no matter what visa one holds ..if you bust 183 you are tax resident....EXCEPT
the days spent in the USA having entered on a crewmans landing permit(C1/D visa) count for ZERO when accumulating aforementioned days.
The permit allows 29 days on EACH entry.
So green card or not...any foreigner entering as an international flag carrier crewmember is exempt from tax.
CX can call a base anything they want..the FACT is the 'base' is not legally qualified...i.e one may as well be working for cx in hong kong as essentially the same conditions apply.The fact you start and end a flight cycle in the USA is irrelevent and no current law covers it.
Additionally they've ballsed up witholding tax for USAB...
Currently tax is witheld for 'flying in usa airspace' but to invoke this rule more than 50% of total wages must be derived in the USA.
So ...my advice to all concerned..simply read the law.
The obvious answer is read the law.
USAB does not even qualify as a US base. It is a hong kong company, the crews are employed and paid in hong kong just as they were before they left for either canada or the usa 'base'.
The 'resident for tax purposes' in the USA is defined as 183 days in country ..counting all the current calendar year,1/3 of the previous year and 1/6 of the year before that..add it up and no matter what visa one holds ..if you bust 183 you are tax resident....EXCEPT
the days spent in the USA having entered on a crewmans landing permit(C1/D visa) count for ZERO when accumulating aforementioned days.
The permit allows 29 days on EACH entry.
So green card or not...any foreigner entering as an international flag carrier crewmember is exempt from tax.
CX can call a base anything they want..the FACT is the 'base' is not legally qualified...i.e one may as well be working for cx in hong kong as essentially the same conditions apply.The fact you start and end a flight cycle in the USA is irrelevent and no current law covers it.
Additionally they've ballsed up witholding tax for USAB...
Currently tax is witheld for 'flying in usa airspace' but to invoke this rule more than 50% of total wages must be derived in the USA.
So ...my advice to all concerned..simply read the law.
.
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I dont think the crew member entering on the crew C1/D visa needs to explain anything. The Visa is self explanatory.
Visas are good - save you having to justify your entry to poorly educated, low paid, barely english speaking protectors of the border that they themselves infiltrated a few years earlier. Apologies to the few fluent intelligent ones.
It should more likely be a case of the company having to explain why it has not been doing things correctly. One may wish to question the validity of the high price advice the Company received, that appears to have been either woefully incorrect or interpreted and applied wrongly.
I think you may find Blunderbus knows a lot more than he is cracking on, I believe he's acutely aware of the legislation with regard to how it applies to non-US citizens.
Visas are good - save you having to justify your entry to poorly educated, low paid, barely english speaking protectors of the border that they themselves infiltrated a few years earlier. Apologies to the few fluent intelligent ones.
It should more likely be a case of the company having to explain why it has not been doing things correctly. One may wish to question the validity of the high price advice the Company received, that appears to have been either woefully incorrect or interpreted and applied wrongly.
I think you may find Blunderbus knows a lot more than he is cracking on, I believe he's acutely aware of the legislation with regard to how it applies to non-US citizens.
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Jriv.
Any foreign national can operate into the US and stay there for 29 days on his crew visa. If he is flying a foreign registered aircraft on a Hong Kong AOC he is based in Hong Kong. If the company gives him 28 days R and R in the US that does not constitute a basing. We got into this mess because we called the places of R and R 'bases' and then we compounded the problem by pretending that we could onshore a foreign entity involved in international travel.
CX should return to the position pre-2008. What they were doing was perfectly legal, although their expensive advisers seemed not to understand the legislation and gave appllingly bad advise. I would like to volunteer my services to CX as an adviser with a roaming brief. I would charge half the money and my advice would be no worse than that of their current internationally recognised advisers. CX should sue K....G for this mess.
Any foreign national can operate into the US and stay there for 29 days on his crew visa. If he is flying a foreign registered aircraft on a Hong Kong AOC he is based in Hong Kong. If the company gives him 28 days R and R in the US that does not constitute a basing. We got into this mess because we called the places of R and R 'bases' and then we compounded the problem by pretending that we could onshore a foreign entity involved in international travel.
CX should return to the position pre-2008. What they were doing was perfectly legal, although their expensive advisers seemed not to understand the legislation and gave appllingly bad advise. I would like to volunteer my services to CX as an adviser with a roaming brief. I would charge half the money and my advice would be no worse than that of their current internationally recognised advisers. CX should sue K....G for this mess.
Last edited by BIG MACH; 12th Feb 2011 at 15:30.
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Unfortunately, there's more to this can of worms than simply what the US federal law says. In the US, each state has it's own set of laws about a lot of things. Employment and taxes are a couple of them to say the least. Years ago an airline I used to work for got caught by the state of California for not providing state mandated overtime pay (higher than federal requirements), making employees pay for half their uniform costs (to be fully paid for by employer in CA). The company's lawyers (high paid large Texas law firm) argued that since the company is/was Texas based, it shouldn't have to comply with California law in those regards and that since the paychecks are issued in Texas, all those employees are subject to Texas labor laws, not California's. Well they lost in court to state of California’s labor board and paid over $250,000 USD in overtime back pay alone. The Judge's ruling went as far as saying that even if they were a foreign company, as long as they based even a single employee in the state of CA, they had to comply with CA’s labor laws for at least that one employee.
It’s amazing how they insist on running this airline as if it’s the same small less than 500 pilots popsicle stand outfit it once was, in this and many other ways. Currently, this popsicle stand is under the radar of the states in the US. They don’t even understand the federal law which is simple in comparison. They don’t understand what “basing” means under legal terms. You can’t say someone is based at XXX but they’re not a “resident” of that place. Good luck banging your head against the wall, but the law is what it is. Nobody gives a damn what your definition of it is. Once you call it basing, good luck trying to say you really mean something else, even if you really do. So why even call it that in the first place? All of this could’ve been prevented by either first getting the approval of the corporate legal department (which from the looks of things, we don’t have one) or do what the corporate legal department would’ve done if one existed, …HIRE AN IN COUNTRY LEGAL FIRM IN EACH COUNTRY! Which is the only way to get advice worth a crap when you’re such a large international company. Run this place like it’s a 21st century international airline, not like a 19th century colonial possession. Which happens to be the corporate culture mentality in all things around here.
It’s amazing how they insist on running this airline as if it’s the same small less than 500 pilots popsicle stand outfit it once was, in this and many other ways. Currently, this popsicle stand is under the radar of the states in the US. They don’t even understand the federal law which is simple in comparison. They don’t understand what “basing” means under legal terms. You can’t say someone is based at XXX but they’re not a “resident” of that place. Good luck banging your head against the wall, but the law is what it is. Nobody gives a damn what your definition of it is. Once you call it basing, good luck trying to say you really mean something else, even if you really do. So why even call it that in the first place? All of this could’ve been prevented by either first getting the approval of the corporate legal department (which from the looks of things, we don’t have one) or do what the corporate legal department would’ve done if one existed, …HIRE AN IN COUNTRY LEGAL FIRM IN EACH COUNTRY! Which is the only way to get advice worth a crap when you’re such a large international company. Run this place like it’s a 21st century international airline, not like a 19th century colonial possession. Which happens to be the corporate culture mentality in all things around here.
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The Judge's ruling went as far as saying that even if they were a foreign company, as long as they based even a single employee in the state of CA, they had to comply with CA’s labor laws for at least that one employee.
