FlightMate wrote:Regarding the outflagging of crew members, it seems a bit complicated for SN, isn't it?
I thought the tax agreement between Belgium and (a lot of) other countries says that crew members will be taxed where the aircraft are registered (and where the operational management of that airline is located - thus Brussels).
Or could you explain how using wet leasing of crew might work? Would you need a new AOC?
Would the pilots just be employed by an agency like Park?
I can shed some light.
If you can reach an agreement with your CAA, you could work with a contracting scheme.
However, in such case the crews would still be taxed in Belgium as the workplace and permanent residence is here under the general 6 months rule. There is however a loophole, not sure if it bears more weight than the place of work rule, that allows crews of ships and aircraft to file their personal taxes (this does generally not ijclude social contributions that are paid in country of residence.) in the country of registration of the aircraft.
The uk have closed that loophole.
5.6 Where you are a seafarer or a member of an aircraft crew, we normally treat your duties
as performed in the UK if
• the voyage or flight does not extend to a place outside the UK, or
• you are resident in the UK and the voyage or flight begins or ends in the UK, or
• you are resident in the UK and embarked on part of a voyage or flight which
begins or ends in the UK.
(...)
5.7 Whether duties you perform in the UK are ‘incidental’ to your overseas duties
(paragraph 5.5) depends on all the circumstances. If the work you do in the UK is of the
same kind as, or of similar importance to, the work that you do abroad, it will not be
merely incidental unless it can be shown to be ancillary or subordinate to that work. It is
normally the nature of the duties performed in the UK rather than the amount of time
spent on them that is important, but if the total time you spend working in the UK is
more than 91 days in a year, the work will not be treated as incidental. Examples of
duties which we do not normally regard as incidental are
• attendance at directors’ meetings in the UK by a director of the company who
normally works abroad
• visits to the UK as a member of the crew of a ship or aircraft
• visits to the UK in the course of work by a courier.
And otherwise it's possible to register an aircraft in Ireland, like Alitalia does.
Ireland is the sole EU member who has ratified the the Cape Town treaty allowing it to keep aircraft leased out by Irish entities to foreign carriers, under its jurisdiction.
The advantage is that it allows to cut leasing costs to lessee and risk to lessor, by reducing administrative and legal jibber jabber in case of payment default by the lessee.
A wetlease could be considered but it depends if you can work around the residence and place of work limitations.
Ryanair is getting away with it because its flight crews are self-employed in Ireland, selling services through the intermediary Brookfield and operating aircraft registered in Ireland, for a company headquartered in Dublin. Depending on the law in Belgium, any variation from this combination could make it unworkable.
Theoretically, Ryanair's practices are not very legal as their way of working conflicts with the definition of self-employment in Belgium...
Here's an idea for mr Q: get back the lost income tax revenue and employer social contributions from Ryanair. On the other hand, Ryanair is much cheaper than SN, which is good for a lot of low income households, so I dont give a d+mn about a few higher income pilots contributing more and accepting to work for much less. There are thousands of motivated jobless pilots swarming around in the Benelux to replace each one of them.
Irony is: a lot of SN staff are part of that group of low income households who use Ryanair, despite so-called "staff rates". Even at those discounted fares, Ryanair plays out cheaper especially when travelling with family, and offers more options of destinations.
