News and Insights

British Columbia Notice 2012-004, “Notice to Commercial Air Services with International Flights”

Tax Development Feb 27, 2012

The province of British Columbia has issued this notice to explain how the motor fuel tax exemption for jet fuel and the related refund provisions announced in the 2012 Budget apply to operators of commercial air services with international flights.  Effective April 1, 2012, jet fuel used by commercial air services for international flights is exempt from motor fuel tax.  However, this exemption does not apply to commercial flights between two points in British Columbia or flights that connect another point in Canada to British Columbia.

In order to qualify for a point-of-sale exemption or a refund of motor fuel tax, a person must own or operate a commercial air service that provides members of the public, for a fee, the following:

  • international air transportation of passengers, goods, or both; or
  • international air services other than the transportation of passengers, goods, or both.  

In addition, the commercial air service must hold a license issued by the Canadian Transportation Agency and, if required, operating certificates issued by Transport Canada for the types of aircraft used on flights between British Columbia and points outside Canada.  

If the above criteria are met and a commercial air service has no flights between two points in British Columbia or that connect another point in Canada to British Columbia, the person may apply to become designated as a registered consumer of jet fuel, and effective April 1, 2012, may receive a point-of-sale exemption from motor fuel tax on jet fuel.  Qualifying commercial air service providers may apply for a registered consumer certificate as an international air service by completing form FIN 165, “Application for Registration as a Registered Consumer under the Motor Fuel Tax Act”.  

Commercial air service providers that are not eligible to be designated registered consumers of jet fuel must pay motor fuel tax on all jet fuel purchases; however, they may apply for a refund of the motor fuel tax paid on fuel used for international flights.  Refunds may be submitted using form FIN 147, “Refund of Motor Fuel Tax – Purchaser of Fuel”.  

BC Notice 2012-004