It was 2012 when the policy created by the CRA or Canada Revenue Agency regarding taxable benefits concerning personal usages of an aircraft meant for business purposes was cancelled. After that, the agency has no existing policy that they follow when it comes to business aviation. This became a more pressing issue with the introduction of the national audit project three years later which was also devised by the Canada Revenue Agency. This is a time when firms regarded accountant liability insurance as an important investment especially with the uncertainty of being question by the CRA.
After the initiative to start a national audit, many owners decided to put up their aircrafts for sale. Some postponed their supposed acquisitions while others even cancelled their plans.
It was March 7 of last year when the CRA decided to introduce another policy which is mainly due to the strong stand by the Canadian Business Aviation Association. It was more than a year ago when the new policy was introduced and the business aviation sector has learned a lot of things regarding this policy.
The first is that despite the presence of the policy, it did not help the aim of the sector to bring back the predictability they used to have. Furthermore, the CRA clarified during a conference that the new policy was not made to tackle all scenarios but rather it serves as a general guideline for everyone in the industry. The auditors of the Canada Revenue Agency are still left on their own to decide regarding a number of files under their jurisdiction. This caused a lot of stir because the audits are considered be aggressive at times which is not a good combination with auditors who have limited experience or those that do not have much understanding when it comes to the matters of business aviation.
Another troubling matter is that auditors have the misconception that corporate air crafts are in the same league as corporate condominiums or yachts – classified under luxury instead of an essential business tool. As to make sure the firms are not affected if they are to be audited, many took on accountant liability insurance to make sure their tracks are protected until a new policy is introduced to tackle every issue in the industry.