The Canadian Seafarer & Taxes

I recently enquired about taxes after being at sea for three years and finding that my British counterparts don’t pay taxes as sailors have a tax exemption. Now here is the funny part. I contacted Revenue Canada in Ottawa and enquired if there were any deductions or exemptions for Canadians working at sea. Now after talking to about five or six different people, I actually got someone who could give me an answer even if it was all but incorrect. The person who I finally got, told me to file an application for non-residency, basically I was dropping all ties to Canada.

With this information, I filled a form given to me and submitted it, thus beginning the battle with Revenue Canada. It took about a month and a half, maybe two months but I finally got a reply back from Revenue Canada rejecting my application on the basis that I wasn’t really classified as working outside the country. Now that’s interesting since the ship’s I work on were not in Canada or Canadian registered. At this point we had a few more letters back and forth to Revenue Canada but they just didn’t seem to understand the idea that the ships were outside Canadian waters and foreign registered and that I was only back in Canada for about 9 or 10 weeks in a calendar year.

So with this we approached our local MP. Now you think this would have helped but proved to be more frustrating than talking to Revenue Canada. The first thing my MP had me do was sign a parliamentary release form so he could act on my behalf and ask questions to Revenue Canada. Now with him hearing my points on why Canadian sailors should be forwarded some sort of tax break or exemption for money earned at sea. He agreed that it was unfair that we are paying full taxes while not being able to get any or most of the social benefits that a full taxpayer on land would get.

Now here are some points that were made:

1. We are not able to contribute to CPP like people on shore working can.

2. We are not able to collect UI or EI (Employment Insurance) as we work on ships that are foreign registered and outside of Canadian waters.

3. Because you’re outside of the country you are no longer eligible for MSP (Medical Service Plan) if you are in British Columbia. I am not sure about other provinces so you may want to check.

4. Most of us are outside the country and when we do come back we are home for less than 180 days per year. Which is in the definition of a non-resident and thus they can apply for a non-residency status for tax purposes.

5. My dual nationality ( British ) has tax exemptions for seafarers and the Company I work for is a Bermuda company which has not taxes on sailors.

6. The ships I server on are Bermuda registered and fly Bermuda flag as their flag state. They also abide by Bermuda law.

Now there were a few more points that were made in by MP. Now my MP approached Revenue Canada about this and what was told to him was that sailors do not fall under any classification, so we are classified regular residents of Canada. Therefore we pay taxes just like every other person working on land. Now the odd thing is we are not in the country like everyone else as we are only home for a few weeks a year. Also if you live in British Columbia you will loose your MSP (Medical) as your out of the country for over 180 days.

I was looking on another website, which another seafarer has done and he also has written letters to the government. Now one of the points he made was that sailors come home with large amounts of disposable income which helps the economy. Well after being taxed I can tell you that has now changed.

One suggestion that was given to me was to get all Canadians who work on merchant navy ships to write a letter of discontent to their local MP, a job easier said than done. If the voice is large enough maybe the government will look at updating the income tax laws to give sailors a tax break. If you don’t think it is possible then you may want to look at the Northern Residency Deduction form on your next income tax return and see what a tax break the guys who work up North get for working there! Just put what you earn into the form and see what type of break you would get.

So what can we do to be heard? Well for one put your comments here on this Blog as the blog will be emailed to all MP’s. Second, email your MP and the Finance Minister about your discontent for the way the Canadian seafarer is being unjustly taxed compaired to others. Here is the link to the complete list of Canadian MP's and their contact and email information:

http://webinfo.parl.gc.ca/MembersOfParliament/MainMPsCompleteList.aspx?TimePeriod=Current&Language=E