Ticket Cross-Reference for Tax Application and Exemption Purposes

Overview

For tickets issued effective 11 October, 2004, a service fee of CAD25 (plus applicable tax) will be assessed for a missing or an incorrect cross-reference where a tax exemption may apply.

Ticket cross-reference for Canadian tax purposed on continuous journey:

Tax application:

  • GST-Canadian Goods and Services (XG)
  • QST-Quebec Sales Tax (XQ)
  • HST-Harmonized Sales Tax (RC)
  • ATSC-Canadian Air Travellers Security Charge (CA)
  • AIF-Canadian Airport Improvement Fee (SQ)

(No exemption to YYZ AIF)

Some Exemptions May Apply

When 2 or more tickets are issued for different portions of one single continuous journey, a ticket may be tax exempt if issued in connection with an international ticket, as long as the conditions and restrictions regarding stopovers and/or connections are met.

International connection is within 24 hours; over 24 hours is considered a stop. Domestic or transborder connection is within 4 hours; over 4 hours is considered a stop.

GST, QST, HST, AIF is exempt if domestic is connecting within 24 hours to an international ticket or journey. The exemption does allow for one stop in either direction inbound or outbound. However, if there is a stop in both directions outbound and inbound the tax is not exempt.

For tax exemption, the domestic ticket must be cross-referenced in the endorsement box with the carrier, flight number, date, origin and destination of the connecting flight. (See examples of required endorsements below.)

ATSC is exempt if the domestic ticket is connecting within 24 hours to an international ticket. If the connection is over 24 hours, it is then considered a stop. There are no stops allowed in either direction (outbound or inbound) for the ATSC exemption. If one or more stops exist then the ATSC will apply (unlike GST/QST/HST/AIF which allow for one stop in either inbound or outbound direction). For ATSC exemption, the domestic ticket must be cross-referenced in the endorsement box with the carrier, flight number, date, origin and destination of both the inbound and the outbound connecting flights. (See examples of required endorsements below.)

Note: Tickets issued for VUSA and coupon type fares (AIRPASS) may be issued in conjunction with international travel and must connect at on point either on the outbound or inbound in order for the trip to be considered a continuous journey for tax exemptions as outlined in this document.

Examples of Required Endorsements:

When connecting to international flight(s) endorse the domestic ticket with:

  • Carrier, flight number, date, origin and destination of the 24 hours connecting flight. e.g. AC 856 08FEB YYZ/LHR
  • Air Canada's 014 connecting ticket (if space permits in endorsement box) Note: OAL ticket number is not an acceptable cross-reference without carrier flight number, date, origin and destination of connecting flights.

When connecting to a cruise endorse the domestic ticket with:

  • "CONX TO CRUISE" and
  • Port and date of sail along with length of cruise (7DAYS) e.g. CONX TO PRINCESS MIA 08FEB04 7D
  • Connecting to a cruise does not exempt the ATSC, as this is not a connection to air transportation.

When surface travel (other than air) exists in the journey, endorse the domestic ticket with:

  • Mode of transportation
  • Dates of travel, origin and destination of surface travel; e.g. GREYHOUND BUS TOUR 08FEB YYZ-DTW (This is required in order to connect any domestic/transborder travel to the international travel).
  • Connecting to any other mode of transportation, other than air, does not exempt the ATSC as this is not a connection to air transportation.

If the travel agency does not issue all the tickets making up the continuous journey the travel agency must ensure they maintain meticulous records (copies of all documents) which would serve as evidence that the journey was indeed continuous. If evidence is not available or cannot be documented or retained at time of sale, then the applicable taxes must be collected.

If applicable taxes are not collected and the ticket is not properly cross-referenced with all pertinent information, Air Canada will issue a debit memo to the agency. It will then be the travel agency's responsibility to provide the required documentation to validate tax exemption. If the travel agency is unable to provide this information, they will then be required to pay the debit memo.

The information is mandatory per tax authorities.