Search - consideration

Repairs or Running Expense The formula for ascertaining the cash consideration paid by the taxpayer on the purchase of the assets of a business involved calculating the value of the assets transferred to it and deducting an estimated sum in respect of accrued staff liabilities. The total consideration given by the taxpayer was expressed to be that cash consideration together with the assumption of liabilities, including all liabilities of the vendor in respect of the transferred employees. Because the accrued staff liabilities had been assumed by the taxpayer as part of the consideration for the purchase of the assets, the discharge of that liability was a capital expenditure. ...

Canada, 2013 FCA 269-- summary under Subsection 153(1) Summary Under Tax Topics- Excise Tax Act- Section 153- Subsection 153(1) "consideration" under law of contract In the course of finding that the appellant was receiving a financial supply from the casinos it contracted with, Sharlow JA stated (at para. 15): In the context of this appeal, the word "consideration" should be understood to mean anything that would be consideration under the law of contract, and "taxable supply" should be understood to include anything supplied in the course of a commercial activity except a "financial service" as defined in subsection 123(1) of the Excise Tax Act. ... Words and Phrases consideration ...

The Queen, 2016 TCC 172, aff'd 2018 FCA 124-- summary under Paragraph 20(1)(e) Summary Under Tax Topics- Income Tax Act- Section 20- Subsection 20(1)- Paragraph 20(1)(e) failure to advance evidence showing allocation of fees to share consideration The taxpayer (“Alcan”) incurred various investment dealer, legal and other fees in connection with its successful hostile bid for most of the shares of a French public company in consideration for cash and Alcan shares. After finding that Alcan had not sufficiently raised the issue of the deductibility of such expenses under s. 20(1)(e) in compliance with the large corporatin rules in s. 165(1.11), Hogan J went on to find that, in any event, there was an insufficient evidentiary basis for the deduction, stating (at para. 201): [T]he Appellant has offered no evidence to justify an allocation of the fees of the service providers (Morgan Stanley, Lazard Frères and Sullivan Cromwell) to the services required with respect to the share consideration and those required with respect to the non‑share consideration. ...

However in cases where the payments are made for purchase of software as a product, the consideration paid cannot be considered to be for use of the right to use the software. ... State of Andhra Pradesh (2004) 271 ITR 401 (SC)]… Clearly, the consideration paid for purchase of goods cannot be considered as ‘royalty’. ... In cases where payments are made to acquire products which are patented or copyrighted, the consideration paid would have to be treated as a payment for purchase of the product rather than consideration for use of the patent or copyright. ...

More precisely, the Manager agreed to relinquish its receipt of that X% of its fees, 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. ... This turned principally on whether this consideration paid by the Funds to Funding Corp was tainted under para. ... Therefore, the consideration paid by the Funds to Funding Corp was tainted as Funding Corp was providing a management service- so that the fee amounts assigned by the Funds to Funding Corp. were consideration for a taxable imported supply. ...

Agence du revenu du Québec, 2020 QCCQ 281-- summary under Paragraph (b) Summary Under Tax Topics- Excise Tax Act- Section 123- Subsection 123(1)- Residential Complex- Paragraph (b) consideration for parking spots was part of the consideration for (condo) residential complexes for new housing rebate purposes The plaintiff (“Grands Palais”), which had constructed a condominium complex that included 363 condo units and 408 parking spots (each having a separate cadastral lot), received assignments from the condo unit purchasers of their entitlements to the Quebec new housing rebate, and paid corresponding rebates to them on their purchases. ... The ARQ assessed Grands Palais on the basis that the consideration paid by 93 of the purchasers for their “single unit residential complex” included the parking spot purchased by them at the same time (viewed by the ARQ under the “residential complex” definition as being “attributable to the unit and … reasonably necessary for the use and enjoyment of the unit”), so that such total consideration exceeded the maximum $300,000 permitted consideration for purposes of the new housing rebate (pursuant to s. 362.2 of the Quebec Sales Tax Act). ...

The Queen, 2021 TCC 25, aff'd 2023 FCA 76-- summary under Section 11.1 Summary Under Tax Topics- Excise Tax Act- Schedules- Schedule VI- Part II- Section 11.1 orthodontic practices make two supplies of services and devices CRA disallowed ITCs claimed by one of the practices of orthodontist’s professional corporation on the basis that the patient invoices did not set out the consideration for the zero-rated supply of orthodontic appliances separately from the consideration for the exempt supply of orthodontic services. ... Wong J noted (at paras. 19-20): The Minister has an administrative arrangement with the Canadian Dental Association such that orthodontists may file their GST returns using 35% of the patient’s total treatment cost as an estimate of the consideration for the supply of the orthodontic appliance. When the actual figures become available (such as at year-end), orthodontists are then required to reconcile their 35% ITC estimate with their actual taxable supplies. … The arrangement also requires that the orthodontist identify the consideration for the zero-rated supply of the appliance separately from the consideration for the exempt supply of services. ...

Piche transferred such Class C shares to Newco under s. 85(1) in consideration for shares of Newco having an equivalent fair market value (“FMV”). ... In rejecting this submission, Noël CJ stated (at para. 58): [T]he adequacy of the consideration given must be measured against the value of the property transferred by way of a “snapshot” taken at the point in time when the transfer takes place. … [I]t is not disputed that Newco gave Oldco adequate consideration at that time …. ... It follows that what was given by Newco as consideration are shares having a value of $30 million. ...

The Queen, 2018 TCC 59-- summary under Subsection 141.01(4) Summary Under Tax Topics- Excise Tax Act- Section 141.01- Subsection 141.01(4) s. 141.01(4) deems free supplies to be taxable or exempt supplies In the course of a general discussion, D’Arcy J stated (at para. 76): Generally speaking, property or services that are used in the making of supplies for no consideration or nominal consideration are deemed to be used to make either taxable supplies for consideration or exempt supplies. ...

The Queen, 2006 DTC 3006, 2006 TCC 256-- summary under Subsection 97(2) Summary Under Tax Topics- Income Tax Act- Section 97- Subsection 97(2) partnership subscription for taxpayer affiliate pref shares not boot The taxpayer transferred assets of a business to a partnership in what was intended to be an s. 97(2) rollover transactions in consideration for cash, promissory notes and assumption of debt ("boot") totalling an amount less than the cost amount of the transferred assets, and a Class "F" partnership interest stipulated to have a value equal to the balance of the purchase price. ... In finding that the $18.7 million payment made by the Partnership to Holdings ostensibly as consideration for preference shares of Holdings was not additional consideration to the taxpayer for the business assets transferred by it to the Partnership, Bonner J. noted (at p. 3012) that the Crown had admitted in its pleadings that the Class F units received by the taxpayer together with the boot was equal to the fair market value of the transferred assets. Accordingly there was "no room for even a penny of additional consideration when the legal form of the transaction governed". ...