CRA rules that GST applied to credit application fees charged by a financing company to a vendor’s customers before it agreed to factor the related receivables

CRA found that credit application fees, which a financing company charged to prospective customers of an equipment vendor before it agreed to factor (on a secured basis) the receivables of the vendor arising on the sale, were taxable.  CRA’s reasoning is suspect.

Neal Armstrong.  Summary of 9 January 2012 Ruling Case Number 112274 under ETA – s. 123(1) – financial service.