Persepolis – Tax Court of Canada declines to infer the existence of an agency arrangement

A company (“Persepolis”), which had been incorporated to do renovation work on a cost plus 15% basis on a building owned by a corporation whose shareholder was friends with its sole shareholder, was found not to have incurred its renovation costs as agent for that owner in the absence of convincing evidence that the owner “had implicitly accepted an agency relationship with respect to the renovations.” Accordingly, Persepolis had been correctly assessed for failure to charge HST to the owner on the costs incurred by it.

Neal Armstrong. Summary of Persepolis Contracting Inc. v. The Queen, 2017 TCC 89 under General Concepts – Agency.