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Treaty where the recipient never had any interest in the oil field Email this Content A Canadian corporation (“Sulpetro”), which had rights to direct and receive the proceeds from a licence its U.K. subsidiary (“SUKL”) held in an offshore U.K. oil and gas field, sold its rights (and shares of the subsidiary) to a U.K. purchaser for consideration that included a royalty that became payable, based on production from the field, when the market price of oil exceeded US$20 per barrel. ... Treaty to impose tax on the royalty payments received by RBC and, in particular, whether they fell within the portion of the definition of “immovable property” in Art. 6(2) (the “fifth limb”) that referred to "rights to variable or fixed payments as consideration for the working of, or the right to work, mineral deposits, sources and other natural resources". ...

The definition in Art. 12(4) of the Australia-U.S. treaty (the “DTA”) of “royalties” referred inter alia to “payments or credits of any kind to the extent to which they are consideration for the use of or the right to use any … trademark.” Moshinsky J found that Australia was permitted under the DTA to impose withholding tax of 5% on a portion of the purchases paid by SAPL to PBS (essentially determined by him to be 5.88%, based on expert evidence as to licensing “comparables”) on the basis that it constituted consideration for the use, or right to use, the trademarks to which PepsiCo or SVC were beneficially entitled, stating: [W]hile the payments made by SAPL were, on their face, payments for the purchase of concentrate, this is not determinative of their characterisation for the purposes of Art 12(4) …. ...

29 April 2024- 11:26pm Autonun – Court of Quebec rejects an ARQ request to change the sales tax provision on which its assessment rested Email this Content Three weeks before trial, the ARQ auditor concluded that Autonun should have been assessed pursuant to QSTA s. 318 (similar to ETA s. 182, regarding amounts forfeited to a taxable supplier being deemed to be inclusive of tax), rather than pursuant to QSTA s. 92 (similar to ETA s. 168(9), regarding deposits not being taxable consideration until applied as consideration) on which the assessment of Autonun had been based. ...

Canadian tax considerations include: Leaving aside the PEO relationship, the foreign entity will often in fact be carrying on business in Canada, under Canadian common-law principles or under ITA s. 253 (which includes reference to orders solicited or anything offered for sale through an agent or servant). Although many non-resident companies claim that they have no employees in Canada because their arrangement with the PEO is instead a contract for services, this position may be less tenable where stock options and other equity consideration are provided as part of the compensation package. ...

14 November 2016- 12:02am CRA provides detailed guidelines on the split-receipting rules Email this Content Positions in the new Folio on split-receipting include: The common law concept of gift (requiring inter alia that “no benefit or consideration must flow to the donor”) and the civil law concept (encompassing “gifts with partial consideration that are remunerative gifts or gifts with a charge”) differ, so that implicitly, s. 248(30), which can permit recognition of a gift where a benefit of under 80% of the donated property’s value flows back to the donor, is more necessary in the common law provinces. ...

31 July 2018- 10:50pm Medallion – Tax Court of Canada finds that a property management agreement with a rental property’s sole owner qualified as a joint venture for GST/HST purposes Email this Content A corporation (MC) acted as a property manager for the rental properties of 10 corporations (the “Owners”) with which it did not deal at arm’s length in consideration for a percentage of the rents (which apparently included exempt residential rents) and other gross revenues that it collected. ... MC took the view that its share of the gross revenues was not consideration for a taxable supply made by it to the Owners (so that effectively GST, on a mangement fee, that would not have been eligible for an input tax credit was being avoided). ...

The taxpayer almost immediately acquired the PCE from IOL for $120 million (claiming 100% of this amount as CCA for that year), and agreed to operate the PCE in consideration for “throughput fees” and cost reimbursements payable to it by IPPL pursuant to “Operating and Services Agreements” (“OSAs”) governed by New Brunswick law. ... In particular, although the OSAs provided that the taxpayer was to operate the PCE, the taxpayer delegated to IPPL, in consideration for fees, the performance of all such operating services, so that nothing changed “on the ground.” ...

CRA had incorrectly computed the GST as being 6/106 of the agreed consideration for the purchase plus the new housing rebate amount that was assigned by the buyer to the appellant, rather than only 6/106 of the agreed consideration – but this did not matter since this erroneous tax was, in fact, collected and, therefore, was required to be remitted. ...

Fund LP transfers its Rollover Shares and Other Investments on a s. 97(2) rollover basis to a new subsidiary LP (New LP) in consideration for the plain-vanilla units. ... The other former partners sell their respective fractions of Non-Rollover Shares to Carry LP for cash consideration equaling the FMV thereof. ...

Bundle Date Translated severed letter Summaries under Summary descriptor 2022-11-30 2022 Ruling 2022-0930901R3 F- Changes to an existing monetization arrangement Income Tax Act- Section 80.6 partial acceleration of a forward contract did not de-grandfather it from the synthetic disposition rules 2004-01-09 17 December 2003 Internal T.I. 2003-0047367 F- Benefit Conferred on Non-arm's Length Person Income Tax Act- Section 246- Subsection 246(1) s. 246(1) applicable to sale of assets by corporation to employee-shareholder at an undervalue Income Tax Act- Section 52- Subsection 52(1) application of s. 15(1) or 246(1) to property distributed by corporation to shareholder would be added to the property’s ACB Income Tax Act- Section 84- Subsection 84(2) s. 84(2) inapplicable on sale by defunct corporation of its assets at an undervalue to one of its shareholders 17 December 2003 Internal T.I. 2003-0047727 F- Right of Use-Deemed Trust Income Tax Act- 101-110- Section 105- Subsection 105(1) no s. 105(1) benefit from personal use of personal-use property of a trust Income Tax Act- 101-110- Section 105- Subsection 105(2) potential s. 105(2) benefit where Opco pays all of the expenses on its property to a portion of which the sister of Opco’s indirect controlling shareholder has a right of (personal) use 9 December 2003 External T.I. 2003-0032585- Immeuble détenu par une succession Income Tax Act- Section 54- Principal Residence- Paragraph (c.1) income beneficiary of estate could be a specified beneficiary using as principal residence Income Tax Act- 101-110- Section 107- Subsection 107(2) s. 107(2) rollover unavailable to an income beneficiary 18 December 2003 Internal T.I. 2003-0044007 F- OPTION D'ACHAT D'ACTIONS RACHETEES Income Tax Act- Section 7- Subsection 7(1)- Paragraph 7(1)(b) full option surrender consideration included under s. 7(1)(b) even though a portion thereof never paid Income Tax Act- Section 40- Subsection 40(2)- Paragraph 40(2)(g)- Subparagraph 40(2)(g)(ii) unpaid and defaulted balance of stock option surrender consideration was not property used in a property or business source Income Tax Act- Section 54- Capital Property employee stock option surrender proceeds were not from the disposition of capital property ...