Why isn't the Seafarer Unions speaking out against taxing seafarers as normal citizens?

Okay is it my imagination but in all the Canadian Seafarer Union web sites that I have visited. None of them speak or show any information about them trying to get taxes for the seafarer made equal to other countries such as the UK. Not one site mentioned that the seafarer should have the same taxation as someone who works up on the oil rigs.

Please tell me this isn’t so. The unions are not fighting for this as it affects every Canadian Seafarer who works in international waters.

Something now on the move?

Here is a link to a site that has some very interesting information. Look at the recomendation on seafarer's and taxes. Now look who did this presentation. Seems we are now getting more attention than before.

http://www.mun.ca/harriscentre/Conferences_Workshops/APTF-2nd_Cities/Dick_Hodgson_presentation.pdf

Giving up your residency to avoid taxes

I have been doing some more research around the internet to find out more information on how the UK handles taxes for seafarers. One of the suggestions I got was to give up my Canadian residency as I hold dual citizenship with the UK. If you are thinking of this you may want to think again as it does have some implications for you here, but if you are then you may want to look at the following links.

http://www.hmrc.gov.uk/pdfs/ir20.htm
http://www.hmrc.gov.uk/bulletins/tb49.htm http://www.resource.offshore.hsbc.com/public/offshore/p2g_pdfs/tax_facts/taxfacts_brochure.pdf

How the UK handles taxes for seafarers

I have been doing some more research around the internet to find out more information on how the UK handles taxes for seafarers. One of the suggestions I got was to give up my Canadian residency as I hold dual citizenship with the UK. If you are thinking of this you may want to think again as it does have some implications for you here, but if you are then you may want to look at the following links.

http://www.hmrc.gov.uk/pdfs/ir20.htm
http://www.hmrc.gov.uk/bulletins/tb49.htm
http://www.resource.offshore.hsbc.com/public/offshore/p2g_pdfs/tax_facts/taxfacts_brochure.pdf

How the UK handles taxes for seafarers

I have been doing some more research around the internet to find out more information on how the UK handles taxes for seafarers. One of the suggestions I got was to give up my Canadian residency as I hold dual citizenship with the UK. If you are thinking of this you may want to think again as it does have some implications for you here, but if you are then you may want to look at the following links.

http://www.hmrc.gov.uk/pdfs/ir20.htm
http://www.hmrc.gov.uk/bulletins/tb49.htm
http://www.resource.offshore.hsbc.com/public/offshore/p2g_pdfs/tax_facts/taxfacts_brochure.pdf

A note about making an offshore bank account

For Canadian citizens, it is interesting to note that while offshore accounts are still exempt from Canadian tax liabilities, Revenue Canada now wants you to start reporting what you have offshore.......Hmmm

Province cracking down on tax cheats

To view artical click here -->Last Updated: Friday, April 23, 2004 9:16 AM ET CBC News

The Quebec government has passed a new law giving more search and seizure powers to civil servants, saying that tax evasion costs $1.6 billion a year. The new law, called Bill 20, will give some Revenue Ministry employees the power to carry out secret seizures. With a judge's warrant, ministry workers would be allowed to track personal mail if they believe it shows evidence of a tax-related crime.

Revenue Minister Lawrence Bergman says the new powers are needed to catch organized tax evaders "where there is fiscal fraud of a large extent, where there's a network involved."
Bergman said the government is cracking down on all sorts of illegal activities aimed at not paying taxes. He said the government could even claim the value of provincial sales tax from drug dealers when they're caught.

The Quebec government has passed a new law giving more search and seizure powers to civil servants, saying that tax evasion costs $1.6 billion a year. The new law, called Bill 20, will give some Revenue Ministry employees the power to carry out secret seizures. With a judge's warrant, ministry workers would be allowed to track personal mail if they believe it shows evidence of a tax-related crime.

Revenue Minister Lawrence Bergman says the new powers are needed to catch organized tax evaders "where there is fiscal fraud of a large extent, where there's a network involved."
Bergman said the government is cracking down on all sorts of illegal activities aimed at not paying taxes. He said the government could even claim the value of provincial sales tax from drug dealers when they're caught."All goods that are sold in the realm of a commercial activity are taxable," he said.

Some suggestions given

I had a conversation with a good friend of mine who is also in the industry. His point was that we should put our money in offshore bank accounts. This way they won't know about it and therefore we don't claim any taxes. Well there are some issues with this. The other suggestion was just don’t tell them how much you actually made. Well that also can get you in trouble as your are now filing false income tax reports. Now if you don’t think that they would ever look at you, think again after reading this article from the CBC news:

Revenue Canada report says agency needs to do more to catch tax cheats in construction industry
To view artical click here -->Last Updated: Saturday, October 8, 2005 4:12 PM ET CBC News

An internal report for the Canada Revenue Agency said a program to catch tax cheats in the construction industry is a good beginning, but the agency needs to do more.The construction sector is a big headache for tax collectors because activity can be conducted without a paper trail, allowing firms and their customers to avoid paying taxes.Since 1999, the federal government has required contractors to report all the payments they make to sub-contractors, in an effort to expose underground operators.The report says that as a direct result of the program, Ottawa has identified $650 million in taxes owed in the last four years.The study, written in June, said about 95 per cent of that money came from sub-contractors who had not filed tax returns. It stated: "The program has had a significant impact on identifying the non-filing population, and achieving enforced tax compliance."But the report found numerous gaps in the program, which inundates the agency with 83,000 contractor information slips each year.It said the agency:

• Rarely imposes financial penalties for a contractor's failure to notify the government of payments to subcontractors.
• Lacks the resources to verify information in 32,000 information slips each year.
• Allows too many contractors to escape scrutiny because of a rule that excludes companies for which construction is less than 50 per cent of their business. This category includes large retailers that offer home renovations, such as Home Depot and Sears.

The study noted that the program has had no impact on companies that deliberately operate on a cash-only basis to escape paying tax and other legal obligations.A spokeswoman for the Canada Revenue Agency said program officials will consider the report's recommendation to assess more penalties. Beatrice Fenelon said: "We're trying to be more consistent and more diligent in the application of those penalties for people who didn't file and for late filers." The agency is examining whether to broaden the scope of the program to include firms in which construction and renovation represents less than half their business.Proposed changes to the program are to be ready by March 31, 2006.A separate focus group carried out for the agency suggests the underground economy is accepted as a common and growing practice in the home-renovation sector.The March 2005 report by Corporate Research Associates said: "Homeowners associate little or no risks with the underground economy, particularly for less expensive or more cosmetic projects. Interestingly, most do not perceive that they are doing anything illegal when paying a contractor cash."Canada has 266,000 construction businesses with total annual revenues of $135 billion. Most have fewer than 10 workers.

Points from another site

I have been doing some more research on this and I have found another site which was created by another seafarer who has the same view. Check out the research he has done at: http://www.dieselduck.ca/taxes/index.htm

He also has some valid points and should be some informative reading for you.

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

A Welcome

When I first joined the ranks of the Canadian Seafarer I had no idea what laid in store for me with Revenue Canada. After being at sea for three years with a major cruise line, I was seeing how much of my hard earned money was going to taxes and seeing very little in return for my share of taxes paid. If I had known this before committing to this career, I may have had second thoughts about it.

After talking to co-workers from the UK and other countries I wondered how come Canada does not recognize the Canadian seafarer and offer some sort of tax break or deduction for us as other countries do for their seafarers.

The purpose of this blog is to inform fellow seafarers and give us a medium to voice as one for changes to the Canadian income tax legislation.