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Tax and Revenue Administration
Aviation Fuels - Exemptions and Licences
Information Circular CL-AV-3R1


Last Reviewed: January 11, 2017
Produced by: Alberta Treasury Board and Finance, Tax and Revenue Administration
For more information: tra.carbonlevy@gov.ab.ca

CL-AV-3R1 / January 2017

AVIATION FUELS - EXEMPTIONS AND LICENCES

NOTE: This information circular is intended to explain legislation and provide specific information. Every effort has been made to ensure the contents are accurate. However, if a discrepancy should occur in interpretation between this information circular and governing legislation, the legislation takes precedence.

This Information Circular explains exemptions from paying the carbon levy on aviation fuels under the Climate Leadership Act (the Act) and the Climate Leadership Regulation (the Regulation), which are administered by Alberta Treasury Board and Finance, Tax and Revenue Administration (TRA). Also discussed is the ability to apply for a licence to purchase aviation fuel exempt from the carbon levy in certain circumstances. Topics include:


DEFINITION OF AVIATION FUELS

  1. The term “aviation fuels” is not defined in the Act and the Regulation. It is a term used by TRA to represent fuels such as aviation gas and aviation jet fuel.

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CARBON LEVY EXEMPTION CERTIFICATES

  1. The Act and the Regulation allow consumers to apply for a carbon levy exemption certificate to purchase aviation fuels exempt from the carbon levy. The exemption certificates are issued by TRA.


  2. A consumer is entitled to purchase aviation fuels exempt from the carbon levy if:

    • the consumer provides, at the time of purchase, a carbon levy exemption certificate or other prescribed evidence of exemption; and

    • the fuel is intended for a prescribed purpose or use.

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Who May Purchase Aviation Fuels Exempt from Carbon Levy

  1. Consumers may purchase aviation fuels exempt from carbon levy from an exempt-sale vendor in situations including:

    • Aviation fuel users who operate an aircraft for a commercial purpose, that is the regular:

      • transport of members of the public or goods for a fee; or

      • provision of services for a fee (e.g., a flight school or crop duster would be considered to have a commercial purpose, whereas a corporate jet would not); and

      who present at the time of purchase a valid carbon levy exemption certificate. In this case the consumer will be able to purchase aviation fuels with an up front exemption from the carbon levy, but will then have to file a carbon levy return and pay carbon levy for flights, or segments of flights, that began at a location in Alberta and arrived at a location in Alberta unless the landing in Alberta is due to an emergency. The carbon levy is payable regardless of where the fuel was purchased including purchase of the aviation fuels outside of Alberta. See Information Circular CL-AV-1, Aviation Fuels – Registration, Payable, Filing and Remittance for more information.

  • the aviation fuel is used by the armed forces of another country, or

  • the aviation fuel is used by a foreign operator of an air transport service as defined in the Canadian Aviation Regulations if:

    • the flight departs from a location in Alberta for which the first scheduled stop is at a location outside of Alberta, and

    • the foreign operator has documentation to satisfy TRA that the flight is as described above.

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Exemption Certificates and Other Evidence of Exemption

Aviation Fuel Users

  1. Aviation fuel users who operate aircraft for a commercial purpose may apply to TRA for exemption certificates so that they may purchase aviation fuels exempt from carbon levy from exempt-sale vendors. Aviation fuel users may apply to TRA for a carbon levy exemption certificate by completing and submitting to TRA the Carbon Levy Fuel User Exemption Application (AT5102).

Armed Forces of Another Country

  1. Armed forces of another country stationed in Alberta may purchase aviation fuels exempt from the carbon levy by providing the same documentation they provide to the exempt-sale vendor when they purchase tax-exempt fuel under the Fuel Tax Act. More information on the sale and purchase of tax-exempt fuel by the armed forces of another country can be found in Information Circular FT-4, Sale of Tax-Exempt Fuel.

Foreign Operators

  1. Foreign air transport service operators are not required to apply for an exemption certificate. An up front exemption is available to foreign commercial carriers on international flights originating in Alberta. The exemption will be provided by the fuel supplier at time of billing, based on the federal documentation establishing eligibility to purchase aviation fuel exempt of excise tax for international flights.


  2. Foreign operators may also apply to TRA for a carbon levy exemption certificate to purchase aviation fuels exempt from the carbon levy by completing and submitting to TRA the Carbon Levy Fuel User Exemption Application (AT5102).


  3. Where TRA approves an exemption application described in paragraphs 5 and 8, a carbon levy exemption certificate will be issued. The exemption certificate will contain an approval number and will identify the type of fuel(s) that may be purchased exempt from the carbon levy.

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Responsibility When issued a Carbon Levy Exemption Certificate

  1. If approved for a carbon levy exemption certificate, you will be able to purchase aviation fuel exempt from carbon levy. However, you will have to file a carbon levy return for flights, or segments of flights, that began at a location in Alberta and arrived at a location in Alberta. To enable you to file the carbon levy return, you will receive a separate Tax and Revenue Administration Client Self-Service (TRACS) enrolment invitation letter. Visit the TRACS section for more information.

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Expiration of a Certificate

  1. A carbon levy exemption certificate expires on the earliest of:

    • the expiry date on the certificate (if shown);

    • the date the certificate holder ceased to conduct the activities that qualified the holder to obtain the certificate;

    • if the certificate holder is a corporation, the date the holder:

      • amalgamates with another corporation;

      • is wound up, liquidated or dissolved; or

      • is subject to any proceedings under the Companies’ Creditors Arrangement Act (Canada);

    • if the certificate holder is a partnership, the date there is a change in the partners of the partnership;

    • if the certificate holder is a joint venture, the date there is a change in the operator of a joint venture; and

    • the date the certificate is cancelled by TRA.

  2. No person that has been issued a carbon levy exemption certificate is permitted to allow another person to use the exemption certificate. Similarly, no person is permitted to use a carbon levy exemption certificate issued in the name of another person.

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Refusal to Issue a Certificate

  1. TRA may refuse to issue a carbon levy exemption certificate in certain circumstances, which may include situations where:

    • TRA determines that the applicant is not exempt from paying the carbon levy on fuel;

    • TRA determines that some or all of the information provided on the application is false or misleading;

    • the applicant holds a valid carbon levy exemption certificate in respect of the same fuel;

    • TRA determines that the applicant has contravened the Act and the Regulation or any other enactment that provides for the imposition of a tax or carbon levy; or

    • the applicant has an overdue debt to the Crown.

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Suspension or Cancellation of a Certificate

  1. TRA may suspend or cancel a carbon levy exemption certificate in certain circumstances, which may include situations where:

    • TRA determines that the holder of the carbon levy exemption certificate is no longer exempt from paying the carbon levy on fuel;

    • TRA determines that information provided to TRA by the holder of the carbon levy exemption certificate is false or misleading;

    • the carbon levy exemption certificate has been lost, stolen, destroyed or is unusable;

    • TRA believes that the carbon levy exemption certificate has been sold to, or is in the possession of or being used by, a person other than the person to whom it was issued or an authorized representative;

    • TRA determines that the holder of the carbon levy exemption certificate has contravened the Act and the Regulation or any other enactment that provides for the imposition of a tax or carbon levy; or

    • the holder of the carbon levy exemption certificate has an overdue debt to the Crown.

  2. Where TRA has suspended or cancelled a carbon levy exemption certificate, the holder of the certificate will be notified of the action taken. Exempt-sale vendors will also be notified of the suspension or cancellation of the certificate.

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LICENCE FOR CARBON LEVY EXEMPTION

  1. The Act and Regulation allow recipients that are fuel vendors or suppliers who would regularly be entitled to a carbon levy refund or credit to apply for a licence to purchase aviation fuels exempt from the carbon levy. The licence for carbon levy exemption is issued by TRA.


  2. A recipient is entitled to a purchase aviation fuels exempt from the carbon levy if the recipient provides, at the time of purchase, a licence for carbon levy exemption.

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Who is Eligible to Apply for a Licence

  1. Recipients that are fuel vendors or suppliers may apply to TRA for a licence to purchase aviation fuels without the carbon levy from an exempt-sale vendor in situations including:

    • the aviation fuel is exported from Alberta in bulk;

    • the aviation fuel is sold to a consumer with a carbon levy exemption certificate; or

    • the aviation fuel is sold to another direct remitter or licence holder.

  2. Recipients do not require a licence and will not be charged the carbon levy if they purchase aviation fuels from a refinery or terminal, designated as such under the Fuel Tax Act, for direct export from Alberta if they provide documentation satisfactory to TRA that the aviation fuel is destined for export from Alberta.

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Application for a Licence

  1. Eligible recipients may apply to TRA for a licence to purchase aviation fuels exempt from the carbon levy by completing and submitting to TRA the Carbon Levy Licence Application For Fuels Other Than Gasoline and Diesel (AT5103).


  2. Where TRA approves the application, a licence for carbon levy exemption will be issued. The licence will contain an approval number and will identify the type of fuel(s) that may be purchased exempt from the carbon levy.

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Responsibility of a Licence Holder

  1. A licence holder may purchase fuel to which the licence applies exempt from carbon levy from approved direct remitters. Once a recipient is issued a licence, the recipient or licence holder in this case will be subject to requirements including filing, reporting, remittance of carbon levy and recordkeeping as a direct remitter in accordance with the Act and the Regulation.

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Use of a Licence

  1. No person that has been issued a licence for carbon levy exemption is permitted to allow another person to use the licence. Similarly, no person is permitted to use a licence issued in the name of another person.

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Refusal to Issue a Licence

  1. TRA may refuse to issue a licence to an applicant for carbon levy exemption in certain circumstances, which may include situations where:

    • TRA determines that the applicant is not regularly entitled to refunds or credits under the Act and the Regulation;

    • TRA determines that some or all of the information provided on the application is false or misleading;

    • the applicant holds a valid licence in respect of the same fuel;

    • TRA determines that the applicant has contravened the Act and the Regulation or any other enactment that provides for the imposition of a tax or carbon levy; or

    • the applicant has an overdue debt to the Crown.

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Suspension or Cancellation of a Licence

  1. TRA may suspend or cancel a licence for carbon levy exemption in certain circumstances, which may include situations where:

    • TRA determines that the holder of the licence is no longer regularly entitled to refunds or credits under the Act and the Regulation;

    • TRA determines that information provided by the licence holder is false or misleading;

    • the licence has been lost, stolen, destroyed or is unusable;

    • TRA believes that the licence has been sold to, or is in the possession of or being used by a person other than the person to which it was issued or an authorized representative; or

    • TRA determines that the holder of the licence has contravened the Act and the Regulation or any other enactment that provides for the imposition of a tax or carbon levy.


  2. Where TRA has suspended or cancelled a licence for carbon levy exemption, the holder of the licence will be notified of the action taken. Exempt-sale vendors will also be notified of the suspension or cancellation of the licence.


  3. Where a licence for carbon levy exemption has been cancelled or suspended, the approval number is also cancelled or suspended.

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Questions

For additional information on the Carbon Levy, please see TRA's Carbon Levy Publications and Forms page.

For general questions about the Climate Leadership Plan, please refer to the Climate Leadership Plan website at http://www.alberta.ca/climate-leadership-plan.aspx.

For questions about the administration of the carbon levy program, please email us at TRA.CarbonLevy@gov.ab.ca.



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