Cases
Glencore Canada Corporation v. Canada, 2024 FCA 3
An integrated nickel-mining public company (“Falconbridge”), entered into merger agreements with a more junior public company (“Diamond...
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| Tax Topics - Income Tax Act - Section 9 - Compensation Payments | break fee was a capital receipt | 188 |
| Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Property | break fee was not consideration for the disposition of a merger right as there was no such “right” | 215 |
| Tax Topics - Income Tax Act - Section 54 - Capital Property | break fee was not proceeds of disposition of a capital property | 176 |
Imperial Oil Resources Limited v. Canada (Attorney General), 2008 DTC 6657, 2008 FC 1037
The Alberta government gave the taxpayer a reduction in the royalties it would otherwise have to pay to Alberta on condition that the taxpayer...
Iron Ore Co. of Canada v. The Queen, 2001 DTC 5411, 2001 FCA 224
The taxpayer made an unsuccessful submission that a refund of Quebec sales tax was not a "refund" described in s. 12(1)(x(iv) because the word...
Canada Safeway Ltd. v. R., 98 DTC 6060, [1998] 1 CTC 120 (FCA)
In finding that a refund of federal sales tax that predecessors of the taxpayer previously had paid in error did not qualify as a reimbursement...
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| Tax Topics - Income Tax Act - Section 9 - Timing | 35 |
The Queen v. CCLC Technologies Inc., 96 DTC 6527, [1996] 3 CTC 246 (FCA)
An agreement the taxpayer entered into with the province of Alberta concerning a coal and heavy oil project was found to have resulted in the...
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| Tax Topics - Income Tax Act - Section 127 - Subsection 127(9) - Government Assistance | contribution arrangement under which the government could not generate a profit was "other assistance" | 130 |
Westcoast Energy Inc. v. The Queen, 91 DTC 5334, [1991] 1 CTC 471 (FCTD), briefly aff'd 92 DTC 6253 (FCA)
Damages which the taxpayer received in settlement of its suit based on the direct and indirect costs incurred by it in replacing a defective pipe...
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| Tax Topics - Statutory Interpretation - Resolving Ambiguity | 84 |
See Also
Verrier v. Agence du revenu du Québec, 2024 QCCA 298
The taxpayer (Verrier) and other clients of an insurance broker (Chabot) participated in a scheme of Chabot to defraud life insurance companies...
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| Tax Topics - Statutory Interpretation - Provincial Law | s. 12(1)(x) and Quebec equivalent were to be interpreted similarly | 199 |
Quintal v. Agence du revenu du Québec, 2023 QCCQ 37, effectively overuled in part by Verrier v. ARQ, 2024 QCCA 298
The taxpayer (Quintal) and other clients of an insurance broker (Chabot) participated in a scheme of Chabot to defraud life insurance companies...
Scotti v. Agence du revenu du Québec, 2019 QCCQ 7579, effectively overruled in part by Verrier v. ARQ, 2024 QCCA 298
An insurance broker (Mr. Chabot) agreed with the taxpayer (Mr. Scotti), as an inducement for Mr. Scotti to acquire a universal whole life policy...
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| Tax Topics - Income Tax Act - Section 152 - Subsection 152(4) - Paragraph 152(4)(a) - Subparagraph 152(4)(a)(i) | failure to seek advice on taxability of $90,000 of receipts | 371 |
GMAC Leaseco Corporation v. The Queen, 2015 DTC 1141 [at 908], 2015 TCC 146
General Motors of Canada Limited ("GMC") made "residual value support payments" to the taxpayer ("GMAC"), which purchased vehicles subject to...
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| Tax Topics - Income Tax Act - Section 13 - Subsection 13(7.4) | amounts replaced reduced lease income rather than contributing to leased vehicles' cost | 239 |
| Tax Topics - Income Tax Act - Section 18 - Subsection 18(1) - Paragraph 18(1)(a) - Timing | capital tax accrued from day to day | 226 |
| Tax Topics - Income Tax Act - Section 9 - Compensation Payments | payments received in consideration for reducing lease payments were compensation for lost lease income, and s. 9 income | 284 |
| Tax Topics - Income Tax Act - Section 9 - Computation of Profit | surcharges received by lessor at lease termination for excess use were income | 264 |
| Tax Topics - Income Tax Act - Section 9 - Timing | inducement payments received by lessor from manufacturer not income until potential repayment obligation quantified | 221 |
Henco Industries Limited v. The Queen, 2014 DTC 1161 [at 3528], 2014 TCC 192
A subdivision property of the taxpayer, a developer, was blockaded by Six Nations protesters. To diffuse the conflict, the Ontario government...
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| Tax Topics - General Concepts - Evidence | parol evidence rule not applying to surrounding evidence/press releases admitted | 239 |
| Tax Topics - General Concepts - Fair Market Value - Land | deference to taxpayer's figure within appraiser's range of values | 111 |
| Tax Topics - Income Tax Act - Section 14 - Subsection 14(5) - Cumulative Eligible Capital | payment to withdraw from business was not an eligible capital amount | 146 |
| Tax Topics - Income Tax Act - Section 23 - Subsection 23(1) | land ceased to be inventory through sterilization rather than business cessation | 184 |
| Tax Topics - Income Tax Act - Section 3 | compensation payment for destroyed business was non-taxable | 171 |
| Tax Topics - Income Tax Act - Section 9 - Compensation Payments | compensation payment for destroyed business was non-taxable | 171 |
Immunovaccine Technologies Inc. v. Canada, 2014 DTC 5119 [at 7309], 2014 FCA 196, aff'g 2013 DTC 1101 [at 531], 2013 TCC 103
Under a federal program for fostering Maritimes development, the taxpayer received interest-free advances, which were not characterized as...
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| Tax Topics - Income Tax Act - Section 127 - Subsection 127(9) - Government Assistance | "government assistance" generally encompasses amounts advanced on non-commercial terms | 271 |
| Tax Topics - Statutory Interpretation - Ejusdem Generis | definition ending in "any other form of assistance" precluded a narrow reading | 82 |
Morguard Corporation v. The Queen, 2012 DTC 1099 [at 2959], 2012 TCC 55, aff'd 2013 DTC 5009 [at 5554], 2012 FCA 306
After finding that break fees totalling $7.7 million received by the taxpayer in an unsuccessful acquisition attempt were fully taxable to it...
Alberta Power (2000) Ltd. v. The Queen, 2009 DTC 1514, 2009 TCC 412
On the early termination of a power purchase agreement between the taxpayer and the Alberta government, the taxpayer received $59.7 million from...
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| Tax Topics - General Concepts - Ownership | person with the benefits and burdens of ownership was the beneficial owner | 243 |
| Tax Topics - Income Tax Act - Section 13 - Subsection 13(21) - Undepreciated Capital Cost - A | 56 | |
| Tax Topics - Income Tax Act - Section 9 - Compensation Payments | amount was received in respect of impaired capital asset (which then was transferred to payor) rather than for lost profits | 111 |
PSC Elstow Research Farm Inc v. The Queen, 2009 DTC 168, 2008 TCC 694
Research grants received by the parent of the taxpayer were not includible in its income under s. 12(1)(x) to the extent that such assistance was...
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| Tax Topics - Income Tax Act - Section 127 - Subsection 127(19) | 53 | |
| Tax Topics - Income Tax Act - Section 37 - Subsection 37(8) - Paragraph 37(8)(c) | 113 |
Hudson Bay Mining and Smelting Co., Ltd. v. The Queen, 2003 DTC 173 (TCC)
Tax credits received by the taxpayer from the Manitoba government were in respect of Canadian exploration expenses that it incurred as agent for...
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| Tax Topics - Statutory Interpretation - Specific v. General Provisions | 68 |
Coughlan v. The Queen, 2001 DTC 719 (TCC)
Damages received by the taxpayer from a corporation of which he formerly was an officer and shareholder for conspiring to injure his reputation,...
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| Tax Topics - Income Tax Act - Section 9 - Compensation Payments | 137 |
Bois Aisé De Roberval Inc. v. R., 99 DTC 380, [1999] 4 CTC 2161 (TCC)
A refund of export taxes previously paid by the taxpayer was deemed to be income under the revised version of s. 12(1)(x)(iv), which had been...
Quincaillerie Laberge Inc. v. The Queen, 95 DTC 155 (TCC)
After finding that $575,000 received by the taxpayer for agreeing to extend the term of a loan for $10,500,000, rather than exercising its rights...
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| Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Disposition | amendment of agreement did not entail its transfer | 142 |
Hill v. The Queen, 94 DTC 1078, [1994] 1 CTC 2169 (TCC), aff'd 95 DTC 5225 (FCA)
A law firm of which the taxpayer was a member was required to use a portion of the amount paid or to be paid to it as an inducement to sign a new...
Tyoxide Canada Inc. v. The Queen, 93 DTC 1499, [1994] 1 CTC 2569 (TCC)
A Quebec tax credit, calculated as 10% of the wages of Quebec employees engaged in research activities, was included in income of the taxpayer for...
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| Tax Topics - Income Tax Act - Section 127 - Subsection 127(11.1) - Paragraph 127(11.1)(c) | 36 | |
| Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Amount | 19 |
Everett's Truck Stop Ltd. v. The Queen, 93 DTC 965, [1993] 2 CTC 2658 (TCC)
The assumption by another corporation ("Polar Oils") of the obligation of the taxpayer to pay $119,658 in consideration for the taxpayer's...
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| Tax Topics - Income Tax Act - Section 244 - Subsection 244(14) | 96 |
St. John Dry Dock & Shipbuilding Co. v. MNR (1944), 2 DTC 663 (Ex Ct)
Before concluding that a subsidy received by the taxpayer from the federal government, pursuant to a statute, for the construction of a dry dock...
Higgs v. Olivier (1952), 33 TC 136 (C.A.)
Before going on to find that a lump sum received by an actor in consideration for his covenant not to exercise his vocation for a period of 18...
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| Tax Topics - Income Tax Act - Section 9 - Exempt Receipts/Business | 129 | |
| Tax Topics - Income Tax Act - Section 9 - Expense Reimbursement | 129 |
Administrative Policy
8 September 2023 Internal T.I. 2023-0987091I7 - Trailing Commissions and Dealer Rebates
S. 12(2.1) deems an amount received by a beneficiary of a trust as an inducement in respect of activities of the trust, or as a reimbursement or...
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| Tax Topics - Income Tax Act - Section 12 - Subsection 12(2.1) | trailer commissions which are temporarily paid by MFT to OEO dealer for it to fund rebates to client MFT unitholders are s. 12(1)(x) inclusions to MFT | 206 |
28 September 2023 CLHIA Roundtable Q. 2, 2023-0971711C6 - Reimbursement by advisor of policyholder expense
Client B agreed to acquire a life insurance policy from Advisor A, and Advisor A agreed to repay Client B for the accounting fees Client B...
7 October 2022 APFF Financial Strategies and Instruments Roundtable Q. 10, 2022-0938301C6 F - Rebate on purchase of GIC
Normally, on the purchase by a client of a GIC of a bank, the bank would receive the face amount of the GIC (say, $21,000) and pay a broker a...
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| Tax Topics - Income Tax Act - Section 54 - Adjusted Cost Base | broker-waived commission included in cost of GIC | 195 |
16 July 2020 Internal T.I. 2019-0817271I7 F - Indemnités reçues à la suite de la négociation
A governmental authority will acquire a number of residential, commercial, forestry, agricultural and undeveloped properties for a construction...
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| Tax Topics - Income Tax Act - Section 54 - Proceeds of Disposition - Paragraph (e) | compensation for loss of value to lands left after the government agreed to purchase a portion thereof, would constitute proceeds of disposition of such remainder | 123 |
| Tax Topics - Income Tax Act - Section 12 - Subsection 12(1) - Paragraph 12(1)(f) | compensation for damages to depreciable property would be included under s. 12(1)(f) rather than under proceeds of disposition, but the related repaid expenses would be deductible | 126 |
2 November 2021 External T.I. 2021-0898151E5 - GST/HST Quick Method of Accounting
When qualifying small registrants elect to use the “Quick Method” of accounting for GST/HST obligations, they thereby cease to be entitled to...
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| Tax Topics - Income Tax Act - Section 248 - Subsection 248(16) | GST/HST Quick Method generally results in a s. 12(1)(x) inclusions, but also increases expense deductions since no s. 248(16) inclusion | 187 |
15 February 2021 Internal T.I. 2021-0879231I7 - Application of paragraph 12(1)(x) to a forgivable
The Regional Relief and Recovery Fund (“RRRF”) provides liquidity assistance for COVID-affected businesses that have been unable to access...
6 November 2020 Internal T.I. 2020-0865661I7 F - SSUC-moment de l'inclusion au revenu/CEWS-inclusion in income
S. 125.7(3) essentially feeds into s. 12(1)(x) by deeming “CEWS” wage subsidies to be government assistance received immediately before the...
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| Tax Topics - Income Tax Act - Section 125.7 - Subsection 125.7(3) | CEWS amounts must generally be included in income under s. 9 or 12(1)(x) by the end of the CEWS periods in question even if not claimed until much later | 415 |
Frequently Asked Questions – Temporary Wage Subsidy for Employers 30 March 2020 CRA Webpage
- The subsidy equals 10% of the remuneration paid between March 18, 2020, and June 20, 2020, to a maximum of $1,375 per employee and of $25,000 per...
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| Tax Topics - Income Tax Act - Section 153 - Subsection 153(1.02) | 371 |
Guidance on the income tax measures to support journalism CRA Webpage 23 December 2019
s. 125.6(2) credit treated as s. 12(1)(x) inclusion
3.21. The amount of the Canadian journalism labour tax credit for a taxation year is...
12 March 2012 External T.I. 2011-0425361E5 F - Assistance paid by franchisor
A franchisor organizes a contest which is restricted to franchisees. Awards received by a franchisee would be considered to be non-governmental...
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| Tax Topics - Income Tax Act - Section 9 - Exempt Receipts/Business | reimbursements of business expenses increase income | 183 |
26 May 2016 IFA Roundtable Q. 6, 2016-0642081C6 - German Organschafts
Under an “Organschaft,” a German parent (“Parentco”) and its German subsidiary (“Subco”) can enter into an agreement under which Subco...
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| Tax Topics - Income Tax Act - Section 90 - Subsection 90(2) | profit transfer payments by German sub to its German parent deemed to be dividends under s. 90(2) | 319 |
| Tax Topics - Income Tax Act - Section 95 - Subsection 95(2) - Paragraph 95(2)(a) - Subparagraph 95(2)(a)(ii) - Clause 95(2)(a)(ii)(B) | profit transfer payments made by a German sub to German parent are s. 90(2) dividends not within s. 95(2)(a)(ii)(B) after 2016 | 153 |
| Tax Topics - Income Tax Act - Section 53 - Subsection 53(1) - Paragraph 53(1)(c) | German profit transfer payment to loss subsidiary is contribution of capital | 158 |
16 February 2016 External T.I. 2015-0618601E5 - Earned or Unearned Revenue
The taxpayer received a lump-sum payment (the “Payment”) from a major supplier (“ACo”) in consideration for entering into a supplier...
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| Tax Topics - Income Tax Act - Section 56.4 - Subsection 56.4(2) | no deferral of lump sum received on signing 15-year supplier loyalty agreement | 182 |
| Tax Topics - Income Tax Act - Section 20 - Subsection 20(1) - Paragraph 20(1)(m) | no deferral for amount included under s. 56.4(2) or 12(1)(x) | 126 |
15 August 2014 External T.I. 2014-0522541E5 - Application of 12(1)(x)
The Ontario apprenticeship training tax credit ("ATTC") is generally included in income under s. 12(1)(x). After noting that a tax credit is...
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| Tax Topics - Income Tax Act - Section 12 - Subsection 12(1) - Paragraph 12(1)(t) | federal apprenticeship job creation tax credit | 91 |
15 September 2014 Internal T.I. 2014-0545001I7 - Grants paid to employers of reservists
Amounts that are received from the Compensation for Employers of Reservists Program by employers of reservists and by self-employed individuals...
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| Tax Topics - Income Tax Act - Section 9 - Nature of Income | compensation for reservist costs | 40 |
12 July 2011 Internal T.I. 2010-0366321I7 - Tax treatment of break fees received
In indicating that a break fee should be included in income under s. 12(1)(x) even if it were not includable under s. 9(1), CRA indicated that per...
12 September 2012 Annual CTF Roundtable, 2012-0453381C6 - 2012 CICA Conference
An insolvent (but not bankrupt) company negotiates a settlement with CRA of unremitted GST for less than the balance owing. CRA stated that "this...
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| Tax Topics - Income Tax Act - Section 80 - Subsection 80(1) - Forgiven Amount | tax debt not a commercial debt obligation | 113 |
| Tax Topics - Income Tax Act - Section 9 - Forgiveness of Debt | forgiveness of source deductions on income account | 108 |
21 March 2011 External T.I. 2011-0395011E5 - Deductibility of Ontario SAT
A particular Ontario tax on life insurance corporations ("SAT") is determined as a fixed percentage of the amount by which the corporation's...
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| Tax Topics - Income Tax Act - Section 18 - Subsection 18(1) - Paragraph 18(1)(a) - Income-Producing Purpose | 156 |
8 October 2010 Roundtable, 2010-0371901C6 F - avantage à l'actionnaire, assurance-vie
Question 2 at the May 4, 2010 CALU Roundtable concerned the situation where (A) Holdco holds an insurance policy on the life of its shareholder,...
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| Tax Topics - Income Tax Act - Section 246 - Subsection 246(1) | CRA will examine if there is a s. 246(1) benefit where subsidiary is beneficiary of life insurance policy held and paid for by parent | 239 |
4 May 2010 Roundtable, 2010-0359401C6 - Rebate Paid by an Advisor to a Policyholder
In certain provinces, a licensed insurance advisor is permitted to pay a portion of the commission earned as a "rebate" to a client purchasing an...
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| Tax Topics - Income Tax Act - Section 148 - Subsection 148(9) - Adjusted Cost Basis - Element A | insurance premium rebate paid by broker does not reduce policy ACB | 260 |
11 February 2009 External T.I. 2008-0271381E5 - Commision Rebates
A broker makes a payment to a customer out of the commissions earned from an insurance company, as permitted by legislation of the Insurance...
6 May 2009 External T.I. 2008-0295581E5 F - Bourses et aide financière aux médecins
Various programs designed to encourage physicians to settle in remote areas of Quebec. Under one such program, financial assistance is granted to...
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| Tax Topics - Income Tax Act - Section 56 - Subsection 56(1) - Paragraph 56(1)(n) | specialized training grants made to unlicensed medical residents to encourage them to settle in remote areas were s. 56(1)(n) fellowships | 156 |
4 July 2007 Internal T.I. 2007-0238391I7 F - Crédit pour stage en milieu de travail
The Quebec tax credit for an on-the-job training period was includible in income under s. 12(1)(x) to the extent that it did not reduce the...
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| Tax Topics - Income Tax Act - Section 12 - Subsection 12(2.1) | inclusion under s. 12(2.1) where Quebec job credit received by partnership members | 67 |
2008 Ruling 2006-0217541R3 - Stock Option Reimbursement
A Canadian public company ("Parentco") and non-resident subsidiaries ("Subco1 and Subco2", collectively "Subco") enter into a "Recharge...
17 February 2006 External T.I. 2005-0153931E5 F - Primes d'installation médecins
Regarding a location incentive program of the Quebec government for medical practitioners setting up in designated territories, CRA...
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| Tax Topics - Income Tax Act - Section 6 - Subsection 6(1) - Paragraph 6(1)(a) | signing bonuses to medical practitioners to locate in remote areas are a taxable benefit | 95 |
2004 Ruling 2004-007680
//www.bci.ca/">www.bci.ca): Non-capital losses of BCI are transferred to its affiliate, Bell Canada, pursuant to transactions under which a...
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| Tax Topics - Income Tax Act - Section 20 - Subsection 20(1) - Paragraph 20(1)(c) | 152 |
28 April 2004 Internal T.I. 2004-0066991I7 F - Paiement incitatif
As an incentive for the sale of exempt life insurance policies (having a savings and investment component) a life insurance brokers would pay to...
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| Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Property | property “includes practically any type of economic interest” | 142 |
| Tax Topics - Income Tax Act - Section 18 - Subsection 18(1) - Paragraph 18(1)(a) - Income-Producing Purpose | per MacIntyre, life insurance premiums are not deductible from business income | 192 |
18 March 2003 External T.I. 2002-0122845 F - CREDIT D'IMPOT POUR LE DOUBLAGE DE FILMS
CCRA indicated that the Quebec tax credit for film dubbing under s. 1029.8.36.0.2 of the Taxation Act (Quebec) is considered to be received for...
26 July 2001 External T.I. 2001-0083295 - INTERACTION OF QST
A Quebec sales tax input tax refund is included in income under s. 12(1)(x) when received.
25 May 2001 Internal T.I. 2001-008500A - Damage/Compensation Receipts
The receipt in Westcoast Energy Inc. v. The Queen, 91 DTC 5334 (FCTD), affirmed 92 DTC 6253 (FCA) would not be considered to be a "refund,...
2001 Ruling 2000-003987
Cash receipts of a partnership for assuming contingent liabilities (respecting unfunded supplemental pension and other retirement benefit...
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| Tax Topics - Income Tax Act - Section 13 - Subsection 13(21) - Undepreciated Capital Cost - A | 123 |
18 September 2000 External T.I. 2000-0029465 - REIMBURSEMENT ON ISSUING SHARES
Where a Canadian parent is reimbursed by its foreign subsidiary for the difference between the exercise price and the fair market value of shares...
15 November 1999 External T.I. 9924585 - PREPAID RENT&SALE OF BUILDING
A corporation that has received prepaid rent with respect to a building leased by it to another Canadian corporation then transfers the building...
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| Tax Topics - Income Tax Act - Section 20 - Subsection 20(24) | prepaid rent on related-party building transfer | 33 |
7 July 1999 External T.I. 9824115 - PROVINCIAL INVESTMENT TAX CREDIT
A provincial investment tax credit is considered to be "received" by the taxpayer at the time it is deducted. Similarly, an investment tax credit...
5 February 1998 External T.I. 9729535 - ASSISTANCE
Respecting a loan that is repayable out of projected revenues, the Directorate stated that "a loan would be a forgivable loan to the extent that...
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| Tax Topics - Income Tax Act - Section 125.4 - Subsection 125.4(1) - Assistance | 19 |
30 November 1996 Ruling 9707693 - INDUCEMENT - SHARE REDEMPTION
The redemption of shares for a nominal amount pursuant to their terms would not constitute an inducement for purposes of s. 12(1)(x) as any...
29 October 1996 External T.I. 9626325 - BOND OPTIONS
S.12(1)(x) could apply to the receipt by a corporation of a premium for granting an option to require it to issue bonds, depending on the...
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| Tax Topics - Income Tax Act - Section 20 - Subsection 20(1) - Paragraph 20(1)(c) | 95 |
11 January 1996 External T.I. 9526845 - ALBERTA GOVERNMENT ASSISTANCE-SMALL BUSINESS EQUITY
A grant made pursuant to the initial Small Business Equity Corporations Act (Alberta) to a taxpayer for the purchase of venture capital...
1 February 1994 External T.I. 9332265 F - Inducement
Where the manager of a mutual fund trust rebates a portion of the management fee earned by it directly to investors who have invested substantial...
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| Tax Topics - Income Tax Act - Section 12 - Subsection 12(2.1) | MFT management fees rebated by manager to large unitholders produce s. 12(2.1) inclusion | 87 |
1994 A.P.F.F. Round Table, Q. 41
"There may be constructive receipt by a taxpayer when an amount is entered as a credit to his account or, as in Everett's Truck Stop Ltd., that is...
94 CPTJ - Q. 1
The Alberta royalty tax credit is not included in a taxpayer's income under s. 12(1)(x).
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| Tax Topics - Excise Tax Act - Schedules - Schedule VI - Part V - Section 1 | 50 | |
| Tax Topics - Excise Tax Act - Section 153 - Subsection 153(3) | 9 | |
| Tax Topics - Income Tax Act - Section 55 - Subsection 55(2) | 33 |
2 December 1993 External T.I. 9321035 F - Taxation of GST and Other Rebates
The Ontario Farm Tax Rebate (entailing a rebate of 75% of property taxes paid on eligible farm land and out-buildings by eligible owners) is...
5 November 1993 External T.I. 9320085 F - Farm Support Payments
Respecting guarantees by the Province of Saskatchewan of loans made to farmers where the Province did not waive its subrogation rights, the...
27 October 1993 Income Tax Severed Letter 9319925 - Farm Support Payments
A loan from the Agricultural Credit Corporation of Saskatchewan generally would be regarded as a forgivable loan and, therefore, as assistance "to...
26 February 1993 T.I. (Tax Window, No. 29, p.17, ¶2440)
A reimbursement or other assistance received in respect of eligible capital property cannot be applied to offset the cost amount of that property...
10 February 1993 T.I. 921720C (See also 13 January 1993 T.I. 923304)
Amounts paid to Atlantic hog farmers were repayable, except that "if certain conditions subsequent are met they may be forgiven". The Directorate...
8 February 1993 Memorandum (Tax Window, No. 29, p.18, ¶2437)
Credits under the Quebec Mining and Duties Act do not fall within the ambit of s. 12(1)(x).
December 1992 B.C. Tax Executives Institute Round Table, Q.13 (October 1993 Access Letter, p. 481)
It is a question of fact whether a lease cancellation payment received by a tenant would be excluded from the application of s. 12.1(x) by s....
"Farm Support Payments: A Paper by the Rulings Directorate addressed to Agriculture Canada - 1992" (September 1993 Access Letter, p. 426).
7 November 1992 Memorandum (Tax Window, No. 27, P. 21, ¶2354, October 1993 Access Letter, p. 478)
Ontario's super allowance for scientific research and current cost adjustment is not considered to be government assistance, incentives or tax...
12 October 1992 T.I. 922359 (September 1993 Access Letter, p. 406, ¶C9-283)
Where an amount is included in income under s. 9, s. 12(1)(x) will not apply and, therefore, the election under s. 13(7.4) will not be available.
31 August 1992 External T.I. 5-921279
Payments made by a non-resident corporation to a related corporation to indemnify it for potential penalties and interest relating to income and...
30 November 1991 Round Table (4M0462), Q. 8.2 - Subscription to Preferred Shares by a Government Body (C.T.O. September 1994)
Where an investment by a government body in shares that pay no dividends does not represent an ordinary business investment, RC generally is of...
30 November 1991 Round Table (4M0462), Q. 8.1 - Acquisition of a Business (C.T.O. September 1994)
"A payment as an inducement covered by subparagraph 12(1)(x)(i) to 12(1)(x)(iii) that is received as part of the acquisition of a business will be...
91 C.R. - Q.19
It is a question of fact whether a contribution of capital by a shareholder to a corporation to fund the acquisition of a capital asset can...
1 August 1991 T.I. (Tax Window, No. 7, p. 18, ¶1382)
The Nova Scotia research and development tax credit (which is a deduction in computing provincial income tax) is government assistance, whereas...
26 July 1991 T.I. (Tax Window, No. 7, p. 2, ¶1376)
No general conclusion has been reached as to whether s. 12(1)(x) may apply to include a premium in the income of the issuer of commercial paper.
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| Tax Topics - Income Tax Act - Section 20 - Subsection 20(1) - Paragraph 20(1)(c) | 22 |
20 March 1991 T.I. (Tax Window, No. 1, p. 2, ¶1158)
FST inventory rebates received pursuant to s. 120 of the Excise Tax Act are considered to be assistance in respect of the cost of property or an...
17 January 1991 Internal T.I. 7-90326
The interest component of damages received by a limited partnership in respect of interest assessments of its partners as a result of the failure...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 14 - Subsection 14(5) - Cumulative Eligible Capital | 43 |
17 January 1991 Memorandum (Tax Window, No. 1, p. 4, ¶1150)
As a result of the amendments to s. 12(1)(x)(iv) effective 1 January 1990 all damages received after that date are included in s. 12(1)(x)(iv),...
14 December 1990 T.I. (Tax Window, Prelim. No. 2, p. 23, ¶1056)
Most grants received under the Ontario Fast Start Program will be taxable under s. 12(1)(x).
30 November 1990 T.I. (Tax Window, Prelim. No. 2, p. 17, ¶1067)
A government loan under which the corporation must commence repayment on the earlier of 2004 and the time at which cumulative sales levels have...
4 October 1990 T.I. (Tax Window, Prelim. No. 1, p. 6, ¶1023)
Where a tenant inducement payment is required to be included in income under s. 9 in accordance with GAAP, s. 12(1)(x) has no application, and no...
19 September 1990 Memorandum ACC 96248
"Where any possibility of forgiveness is inherent in the terms and conditions of a loan agreement, paragraph 12(1)(x) applies to the principal...
90 C.P.T.J. - Q.14
Even prior to the replacement in s. 12(1)(x)(iv) of "expense" by "outlay or expense", s. 12(1)(x)(iv) was not limited to reimbursements of...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 12 - Subsection 12(2.2) | 35 |
11 May 1990 Memorandum (October 1990 Access Letter, ¶1494)
The one-time transitional credit for small businesses provided under s. 346 of the Excise Tax Act will be taxable under s. 12(1)(x).
30 May 1990 T.I. (October 1990 Access Letter, ¶1459)
Where an amount of assistance falls within both ss.12(1)(x) and 37(1)(b), the latter will prevail.
5 February 1990 T.I. (July 1990 Access Letter, ¶1318)
Where a Canadian parent makes a contribution of capital to its wholly-owned subsidiary corporation to fund capital expenditures on SR&ED, the...
5 January 1990 T.I. (June 1990 Access Letter, ¶1252)
Instead of requiring the inclusion in income of payments which grape farmers received from the Department of Agriculture to remove grapes from...
3 January 1990 T.I. (June 1990 Access Letter, ¶1253)
Amounts of government assistance which decrease the cost of property pursuant to s. 53(2)(k) do not have to be included in the taxpayer's income...
89 C.M.TC - "Leasing Costs" - "Application of Paragraph 12(1)(x) of the Act to the Tenant"
s. 12(1)(x) is not generally applicable to interest-free loans provided that the loan is unconditionally repayable. "It is possible that GAAR...
88 C.R. - Q.16
Where a limited partner receives a cash flow grant from the developer if the cash flow received by him from the partnership is insufficient to...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 96 - Subsection 96(2.2) - Paragraph 96(2.2)(d) | 37 |
88 C.R. - Q.46
Where an interest-free loan is provided to an investor in a real estate project which is forgivable to the extent that a guaranteed cash flow...
87 C.R. - Q.17
S.12(1)(x) will not have application solely by virtue of a loan provided as an inducement being made at lower than a commercial rate of interest,...
86 C.R. - Q.8
Minor adjustments to an agreement in writing entered into before May 23, 1985 should not cause an inducement received after May 22, 1985 to be...
86 C.R. - Q.9
A tax credit is "received" for purposes of s. 12(1)(x) when the tax instalments required to be made by the taxpayer are reduced, and otherwise at...
86 C.R. - Q.10
The B.C. venture capital tax credit is not included in income.
Articles
Lewin, "Tax Treatment of Lease Inducement and At-Risk Rules and the New Limited Recourse Debt Rules", 1995 Corporate Management Tax Conference Report, c. 5.
Carr, "Lease Inducement Payments", 1993 Conference Report, C. 32.
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 9 - Compensation Payments | 0 |
Subparagraph 12(1)(x)(iii)
Administrative Policy
14 November 2007 Internal T.I. 2007-0254601I7 F - Paiement incitatif - Bon de souscription
As part of transactions for a sale of a business of Aco to a purchaser (Bco) for a cash sale price, and the entering into of an agreement for the...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 52 - Subsection 52(1) | value of share purchase warrant included in recipient’s income under s. 12(1)(x) increased ACB of warrant | 91 |
18 July 2006 Internal T.I. 2006-0184431I7 F - Prêt d'un gouvernement
In finding that a participating loan to the taxpayer (Xco) was not a forgivable loan, the Directorate stated:
[T]he [Loan] Agreement states that...
Subparagraph 12(1)(x)(iv)
Administrative Policy
7 October 2020 APFF Roundtable Q. 18, 2020-0862931C6 F - 12(1)(x) and CEBA
In commenting on the consequences of a corporation receiving a $40,000 loan under the Canada Emergency Business Account (“CEBA”) program, CRA...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 20 - Subsection 20(1) - Paragraph 20(1)(hh) | the parties can agree to allocate late CEBA loan repayments between the forgivable and non-forgivable loan components | 374 |
| Tax Topics - Income Tax Act - Section 12 - Subsection 12(2.2) | s. 12(2.2) can be applied to non-deductible expenses/consequences of CEBA loan not being forgiven | 271 |
10 November 2020 External T.I. 2020-0861461E5 - TI – Tax Treatment of Loan Forgiveness under CEBA
The Canada Emergency Business Account (“CEBA”) provides interest-free loans of up to $40,000 to small businesses and not-for-profit...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 12 - Subsection 12(2.2) | s.12(2.2) election can be made re s. 12(1)(x)(iv) inclusion for forgivable CEBA loan | 146 |
20 May 2014 External T.I. 2013-0516121E5 F - Debt forgiveness
A compromise by Aco under Division I of Part III of the Bankruptcy and Insolvency Act resulted in reassessments owing by Aco for unremitted GST...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 12 - Subsection 12(2.2) | s. 12(1)(x)(iv) inclusion from BIA settlement of GST interest and penalties could be offset against related expense | 157 |
| Tax Topics - Income Tax Act - Section 248 - Subsection 248(26) | unremitted GST and QST were not obligation "issued" by debtor | 102 |
| Tax Topics - Income Tax Act - Section 80 - Subsection 80(1) - Commercial Debt Obligation | BIA settlement of unremitted GST interest | 127 |
| Tax Topics - Income Tax Act - Section 9 - Forgiveness of Debt | BIA settlement of unremitted GST on sales was on capital account | 82 |
20 November 2012 External T.I. 2012-0440031E5 F - Quebec Tax Credit for Production of Performances
Must the Québec Credit for the Production of Performances ("QCPP"), which is provided by Revenu Québec respecting qualifying expenditures of a...
8 December 2010 External T.I. 2010-0375921E5 - Subsection 20(24)
Where no s. 20(24) election was made in the situation where the vendor of a business has paid a purchaser to assume its deferred revenue...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 20 - Subsection 20(24) | income to both vendor and purchaser if no election/payment by set-off/no prescribed form | 131 |
19 May 2010 External T.I. 2010-0364761E5 F - Beneficiary not taxed on Part XII.4 tax credit
Corporation A, which has a sanitary landfill site and must annually fund an qualifying environmental trust to provide a fund for the post-closure...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 127.41 - Subsection 127.41(1) | Pt XII.4 tax credit is received by the taxpayer respecting Pt XII.4 tax paid by the QET | 119 |
8 October 2004 APFF Roundtable Q. 34, 2004-0087021C6 F - Remboursement de frais de financement
Would s. 12(1)(x) apply in a situation where a corporation (the "Borrower") incurred financing expenses in connection with money that was...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 20 - Subsection 20(1) - Paragraph 20(1)(e) | 66 |
IT-273R2, "Government Assistance - General Comments," para. 12
Timing of recceipt of benefit of tax credit
¶ 17. Federal and provincial tax credits and deductions from tax which are in the nature of...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 13 - Subsection 13(7.4) | 18 | |
| Tax Topics - Income Tax Act - Section 53 - Subsection 53(2.1) | 116 |
Articles
Gregory M. Johnson, Wesley R. Novotny, "An Update on Flow-through Shares in the Energy Sector", 2016 Conference Report (Canadian Tax Foundation),12:1-39
Inclusion of flow-through share indemnity payment under s. 12(1)(x)(iv) and deduction under s. 12(2) as “outlay" (p.12:28-29)
...The CRA's view...
Subparagraph 12(1)(x)(v)
Administrative Policy
19 January 2005 External T.I. 2004-0091601E5 F - Incitatif versé - taux d'intérêt réduit
In order to finance $400,000 of the $500,000 purchase price of a rental property, the taxpayer receives a 5-year mortgage loan from a financial...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 53 - Subsection 53(2.1) | ss. 13(7.4) and 53(2.1) elections unavailable re acquired rental property for cashback received from mortgage lender to offset high interest rate | 198 |
| Tax Topics - Income Tax Act - Section 12 - Subsection 12(2.2) | s. 12(2.2) election available to reduce mortgage interest, re cashback received from mortgage lender, to reduce extra interest incurred in two initial years | 171 |
Subparagraph 12(1)(x)(vi)
Administrative Policy
28 June 2010 External T.I. 2009-0350241E5 F - Crédit d'impôt pour investissement du Québec
Is the Quebec investment tax credit an inducement payment required to be included in income under s. 12(1)(x), or is it applied to the cost of...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 13 - Subsection 13(7.1) - Paragraph 13(7.1)(f) | Quebec investment tax credit reduces capital cost at end of year for which it is claimed, excepting any carryforward portion | 213 |
| Tax Topics - Income Tax Act - Section 127 - Subsection 127(9) - Government Assistance | Quebec investment tax credit is government assistance | 46 |
Subpargraph 12(1)(x)(viii)
See Also
Ritchie v. The Queen, 2018 TCC 113
The taxpayer, who rented his farm to a corporation controlled by him, received an early “signing bonus” of $255,790 from Enbridge for entering...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 54 - Proceeds of Disposition - Paragraph (a) | signing bonus assimilated to proceeds under the signed contract | 113 |
Administrative Policy
16 May 2005 Internal T.I. 2005-0119061I7 F - Montant d'aide-actions
Prod Co, a wholly owned subsidiary of M Co and a "qualified corporation," produces a Canadian film or video production ("CFVP") at a cost of...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 125.4 - Subsection 125.4(1) - Assistance - Paragraph (a) | conversion of loan that was taxable assistance into shares is not itself assistance] | 192 |
| Tax Topics - Income Tax Act - Section 80 - Subsection 80(1) - Excluded Obligation - Paragraph (a) | conversion of loan that was taxable assistance under s. 12(1)(x) into shares with lower FMV would not give rise to forgiven amount | 304 |
| Tax Topics - Income Tax Regulations - Regulation 1106 - Subsection 1106(1) - Excluded Production - Paragraph (a) - Subparagraph (a)(iii) | transfer of all the revenues to a film implies a transfer of its copyright | 191 |
| Tax Topics - General Concepts - Ownership | transfer of the economic benefit of copyright entails transfer of its ownership | 149 |
| Tax Topics - Income Tax Act - Section 53 - Subsection 53(1) - Paragraph 53(1)(c) | subscription for shares of sub at overvalue constitutes a contribution of capital, generating a s. 53(1)(c) basis bump | 80 |