Q.1 Can a written agreement, that describes the relationship between the participants as co-ownership of property (rather than as a joint venture), qualify as an agreement evidenced in writing for purposes of s. 273(1)? CRA responded:
It may be possible that a co-ownership agreement may constitute an agreement evidenced in writing for purposes of subsection 273(1) of the Excise Tax Act, but this will be determined on a case-by-case basis. Furthermore, the nature of the agreement must be one of a joint venture at law. This would require at least two participants being participants under paragraph (a) of the definition of “participant” in…P-106… .
Q.2 In Year 1, Corporations A and B enter into a (joint venture) “Initial Agreement” specifying their rights, responsibilities and relationship and under which they contribute resources and share proportionately in revenue or losses from the joint venture activities. In Year 2, they enter into the “Subsequent Agreement” with Corporation C in which it is designated as the operator of the joint venture and is assigned the responsibility for the managerial or operational control of the joint venture. Corporations A and B each execute a Form GST21 with Corporation C. The rights, responsibilities and relationship between Corporations A and B are not discussed in the Subsequent Agreement. Could both the Initial and Subsequent Agreements collectively be considered “an agreement” for purposes of s. 273(1) so that s. 273(1)(c) could apply? CRA responded:
…[T]he CRA may consider the two agreements to constitute a single joint venture agreement with Company C as the participant/operator of that joint venture effective the date the Subsequent Agreement is entered into where no other provisions of the agreement affect the nature of the relationships between the parties. However, this could only be confirmed after examining the agreements.
