Ultra low-cost Icelandic airline WOW air lands in Canada; offers cheap service to Europe

Source: CNW Press Release

WOW air, Iceland’s only ultra low-cost airline, announced October 1, 2015 that it will begin service to Europe via Iceland from Toronto and Montréal beginning in May 2016 from just CAD $99 one way including taxes¹. Flights to Europe will depart Toronto’s Pearson (YYZ) and Montréal’s Pierre Elliott Trudeau (YUL) via Reykjavik, offering travellers the cheapest connection between Europe and Canada.

After spending about an hour in Reykjavik, it’s just CAD $149 one way, including taxes, to the following European destinations: London, Paris, Berlin, Copenhagen, Amsterdam and Dublin, to name a few. Service from Montréal will begin on May 12, 2016 and Toronto services will begin May 20, 2016. Both services will operate year-round, with departures on Monday, Wednesday, Friday and Sunday.

“WOW air prides itself on offering the lowest fares possible as well as the biggest smile and the friendliest service. When we announced our U.S. routes last year, we promised that it was just the beginning of our growth into North America,” said Skúli Mogensen, sole owner and CEO of WOW air. “I’m thrilled to now announce our new routes to Canada, especially as I lived in Montréal for nearly a decade and also because the Icelandic people feel a special affinity for Canada. ”

The airline’s entry into the Canadian market is expected to create an estimated 100 jobs in the travel sector and represents an investment of CAD $60 million for the two routes to both Toronto and Montréal airports.

Originally launched in November 2011, WOW air now connects travellers from twenty destinations across the U.S. and Europe with the Icelandic capital. Total passenger numbers for June to August 2015 were up a massive 45 per cent on the previous year with 295,000 passengers transported on business and holidays. Passenger loads across all services averaged 95 per cent in July.

WOW air’s expansion into the Canadian market follows the successful launch of transatlantic services from Boston and Washington, DC in early 2015. Both services now operate with consistent carrier loads of more than 90 per cent.

“We have just had our best summer ever and, with these new routes launching in May 2016, next summer is another chance to break records. These great Canadian cities will become our newest destinations but I look forward to announcing even more in the not-too-distant future!” said Mogensen.

The flights between Reykjavik and Canada will be operated using WOW air’s fleet of new Airbus A321 Extended Range aircraft. The airline’s Airbus A320 family aircraft will carry passengers between Reykjavik and other European destinations.

Tickets for the Canada flights went on sale on October 1, 2015 via the company’s website: www.wowair.ca

Europe and South Pacific emerging as good a travel bargains with the low Canadian dollar

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Tax tips for Canadian snowbirds

Tax tips for Canadian snowbirds

BY TERRY MCBRIDE,  The Star Phoenix 

Are you a Canadian snowbird, back home in Canada after a winter stay in Arizona? If you want to avoid having to file a U.S. tax return, you should tell the Internal Revenue Service (I.R.S.) that you are not a U.S. resident.

Form 8840 is due June 15.

If you consistently stay 122 days or more in the United States each year, the I.R.S. expects you to file a U.S. tax return to report your worldwide income. The 122 days happens to be the four months from the end of November to the beginning of April.

The I.R.S. formula counts all the days you stayed in the U.S. in 2014, plus one-third of the days in the U.S. in 2013 plus one-sixth of the days in the U.S. in 2012. When you do the math, stays of 122 days per year make you “substantially present” in the U.S. for 183 days, which is enough for you to become a U.S. resident for tax purposes. Don’t wait to be asked to file a US tax return. Be proactive. Declare each year that you have a closer connection to Canada. Obtain form 8840 from either the I.R.S. website or the Canadian Snowbird Association website.

Form 8840 asks for your passport number and the type of U.S. visa you have. Typically a snowbird has a B-2 visa, meaning the purpose of the trip was recreational in nature, including tourism, vacation, amusement, or visits with friends or relatives.

If you do not mail form 8840 to Austin, Texas each year, you could be asked to file a U.S. income tax return. Even if you are positive that you would not owe any U.S. tax because of the Canada-U. S. tax treaty and Canada’s higher tax rates, the I.R.S. can still charge hefty penalties for neglecting to report your income to the I.R.S. Canada and the U.S. share information. Your date of entry into Canada tells the I.R.S. when you left the U.S. Don’t risk the penalties. File your 8840 form by June 15. Each spouse must file a separate 8840 form. Make a photocopy of your 8840 forms to carry with you the next time you cross the border.

Questions about residency Canadian financial institutions are now compelled to report all the personal information of any U.S. persons holding accounts with them. That means your bank or investment broker must ask you if you have a connection to the U.S. You do have a connection if you spend four months each winter in the Southern U.S. Your bank would have to report your personal information to the I.R.S. Bringing a photocopy of your 8840 form helps you prove to your Canadian bank that you are not a U.S. resident for tax purposes.

U.S. rental property The Canadian income tax return asks the question, “Did you own or hold foreign property at any time in the year with a total cost of more than CAN$100,000?” If the answer is “Yes,” then you need to complete Foreign Income Verification Form T1135 and file it with your income tax return by April 30. If you file your tax return electronically, you can now also file your form T1135 electronically, for the first time.

Snowbirds who own U.S. vacation property purely for personal use and enjoyment can answer “No” to the foreign property question even if its cost does exceed $100,000.

However, if you rent out your U.S. vacation home, you really should seek professional advice about filing a U.S. tax return and completing both the T776 rental schedule and form T1135 with your Canadian tax return.

Terry McBride, a member of Advocis, works with Raymond James Ltd. (RJL). The views of the author do not necessarily reflect those of Raymond James Ltd. (RJL). Information is from sources believed reliable but cannot be guaranteed. This is provided for information only. We recommend that clients seek independent advice from a professional adviser on taxrelated matters. Securities offered through Raymond James Ltd., member of the Canadian Investor Protection Fund. Insurance services offered through Raymond James Financial Planning Ltd., not a member of the Canadian Investor Protection Fund.

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