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9 April 2023- 10:59pm CRA indicates that s. 110.6(14)(f)(i) can apply to an amalgamation and that s. 110.6(1)(e) applies to successive share substitutions (including an amalgamation) Email this Content S. 110.6(14)(f)(i) provides that, for purposes of the requirement in s. 110.6(1)(b) that mooted qualified small business corporation shares ("QSBCSs") must not have not been owned during the 24 months preceding their disposition (the “determination time”) by anyone other than the disposing individual or a related person or partnership, such shares will be considered to have been so owned prior to their issuance by a “bad” owner unless they were issued as consideration for other shares (the “original shares”). ... X) exchanges his majority shareholding of Opco for shares of a new personal holding company Holdco) and then, around a year later, receives replacement shares of Amalco on an amalgamation of Holdco with Opco followed by a sale by him (and the minority shareholder) of their Amalco shares to a third party, CRA accepted that s. 110.6(14)(f)(i) applied on the amalgamation, i.e., that the Amalco shares could be regarded under the scheme of the Act as being “issued” in consideration for the shares of the relevant predecessor (Holdco). ...

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. ...

In addition to numerous transactions to properly package the Segment, the Plan-of-Arrangement transactions included the REIT settling the New REIT, subscribing a modest amount (in the form of a REIT note issued by it to New REIT) in consideration for New REIT units equal in number to the number of outstanding REIT units, distributing a modest amount of cash to a depositary for its unitholders, and selling its units of the New REIT to the unitholders for such cash. ... The proposed transactions also contemplated that the “Investor” (a tax-exempt resident, perhaps a pension corporation) would transfer a significant portfolio of properties to New REIT in consideration for New REIT units, including non-voting Series B units that were convertible into the “regular” Series A listed units. ...

As soon as LBL delivered the products to the store vicinity, and it received the cash consideration, the products were loaded onto the waiting trucks of customers, in turn, of Ms. ... MacNaughton was the recipient of the tobacco products, i.e., the one liable to pay the consideration therefor, and suggested that the s. 87 exemption instead required that the products have become the personal property of Ms. ...

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.” ...