Search - consideration

In finding that the Y% payments were consideration for a taxable supply by Costco, Sharlow JA stated (at paras. 44-45): The value to Amex of exclusivity is readily discernible from the contractual terms. Every Costco sale on a credit card other than an Amex credit card would reduce the value to Amex of the entire co-branding arrangement. … In my view, the interpretation of the contracts that is more consistent with the language of the contracts and the undisputed facts is that [such] payments were consideration paid by Amex to Costco, either for Costco entering into the Co-Branding Agreement, or specifically for the exclusivity provision. ...

In finding that there was a single supply made by the casino (which she later found to be a financial service), Sharlow JA stated (at paras. 25-26): [T]here is no evidence that Global would have been prepared to pay consideration to the Casinos for any of the three elements on its own. Since the three elements are integrally connected and there is a single consideration, there is a single supply.... ...

In his concurring reasons for judgment, Robertson J.A. found that the concession of the Minister in IT-445- that interest paid on funds borrowed to honour guarantees given for adequate consideration, may be deducted from income even though the use of such funds has only an indirect effect on the taxpayer's income-earning capacity- had a legal foundation. However, here the consideration (in the broad sense of the word) received by the taxpayer in return for granting the guarantee was inadequate and the granting of the guarantee was intended to facilitate the income-earning capacity of the principal debtor (Trennd) and not the guarantor (the taxpayer). ...

" Lord Fraser found that the right to receive the additional consideration was an "asset" (broadly defined to mean all forms of property), and that although the additional amount was paid to satisfy or extinguish such right and not as part of the consideration for the sale of the shares, such sum was clearly "derived from" such asset (the deferred right) and therefore was deemed to be received in connection with a disposal. ...

Later, when Pepsi Co. purchased KFC, it was agreed that the agreement to receive the annual amounts would be cancelled in consideration for the payment to him of two lump sums of $67,000 and $300,000. Although the cancellation agreement provided that he and his wife were to provide consulting services, it was found as a fact that he received the two lump sums in consideration for the cancellation of the existing contracts and relationships and that, accordingly, the sums were received by him on capital account as proceeds of disposition pursuant to s. 54(c)(ii)(B). ...

The Queen, 95 DTC 5253, [1995] 1 CTC 447 (FCTD)-- summary under Subsection 55(2) Summary Under Tax Topics- Income Tax Act- Section 55- Subsection 55(2) s. 55(2) did not apply as purpose was creditor-proofing regarding a law suit The two individual shareholders (Lamothe as to 99% and his wife as to 1%) of a corporation operating a machine shop ("Clem Industrial") transferred all their shares of Clem Industrial to the taxpayer (which was a newly-incorporated holding company) in consideration for high-low shares of the taxpayer. They then caused Clem Industrial to pay a large dividend (virtually equal to the fair market value of its outstanding shares) to the taxpayer, which then lent the proceeds back to Clem Industrial in consideration for a demand debenture. ...

In rejecting the Appellant’s submission that it “made, in consideration of the Annual Resort Fee, separate single supplies of services in respect of each Vacation Home,” D’Arcy J stated (at para. 259): It made a single supply by agreeing to use the Annual Resort Fee to fund its operations…with the consideration being based upon the Appellant’s total estimated costs. ...

Stock ‘94 Szolgáltató Zrt. v Regional Customs and Finance Directorate-General for Southern Transdanubia of the National Tax and Customs Office, Hungary, [2016] BVC 45, C-208/15 (European Court of Justice (5th Chamber))-- summary under Supply Summary Under Tax Topics- Excise Tax Act- Section 123- Subsection 123(1)- Supply interest on loan to fund taxable supply was part of taxable consideration A Hungarian company was set up to assist Hungarian farmers by lending them money to fund the purchase by them from it of current assets needed in their business. The European Court of Justice (subject to some further findings of facts to be made by the local court) essentially applied the single supply doctrine to find that the loan interest was part of the consideration for the sale of products by the company to the farmers, so that the interest was subject to VAT (even though, of course, interest on loans viewed as being for a separate supply was VAT-exempt). ...

Canada, 2002 FCA 237-- summary under Subsection 153(2) Summary Under Tax Topics- Excise Tax Act- Section 153- Subsection 153(2) 50-50 allocation of consideration for two supplies made to arm’s length customers It was accepted that the appellant, who operated a “brew-your-own” beer and wine business, was providing separate supplies: the zero-rated sale of ingredients for making the beer or wine: and a taxable supply of its facilities and services to assist its customers in brewing the beer or wine. ... In affirming this decision, Evans JA stated (at para. 2): [S]ubsection 153(2), provides that the consideration for multiple supplies must be allocated reasonably among the supplies. ...

The Queen, 2017 TCC 78, rev'd in part 2019 FCA 217-- summary under Supply Summary Under Tax Topics- Excise Tax Act- Section 123- Subsection 123(1)- Supply dominant element of service provided by financing SPV was financing The manager of various mutual funds (the “Funds”) agreed to relinquish its receipt of a portion of the management fees which it otherwise would have earned (calculated as a percentage of the net asset values from time to time of the funds) and the Funds agreed to pay the same percentage amounts to a special purpose non-resident Citibank-formed vehicle (“Funding Corp”) in consideration for Funding Corp paying the brokerage commissions that were payable on subscriptions by investors for units (or shares) of the Funds. ... Before going on to find that the amounts of the fees so assigned to Funding Corp were deemed by paragraph (q) of the “financial services” definition to be taxable consideration, V.A. ...