Search - consideration

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. ...

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". ...

Revenu Quebec assessed on the basis that this was consideration for taxable supplies by the City, notwithstanding that a supply of such services to the parents would have been exempt under Sched. ... She found (at para. 54) that where (as here) "there is a direct link between the subsidy and the price of the service, the subsidy must be regarded as the consideration, or part of the consideration, for the service, and it is taxable if the service is taxable." However, as it was accepted that the supply was exempt under s. 12, that consideration was not taxable. ...

The Queen, 2017 TCC 75-- summary under Subsection 171(1) Summary Under Tax Topics- Income Tax Act- Section 171- Subsection 171(1) Tax Court had jurisdiction to consider change to description of consideration in s. 97(2) election form R & S Industries was unsuccessful in a motion to have the Federal Court direct CRA to reconsider its decision to not permit R & S Industries to file an amended s. 97(2) election form so as to change the agreed amounts. R & S then appealed to the Tax Court with a view to convincing the Court that the allocation of consideration between partnership-interest and non-partnership interest consideration set out on the (T2059) election form did not reflect the actual agreed allocation. ... Graham J considered that there was a crucial distinction between the T2059’s agreed amounts, which could not be altered by the Minister, and the allocation of the consideration, which was a purely factual matter which was merely recorded on the T2059, and which either CRA or the taxpayer were free to challenge in the Tax Court as not according with the actual facts. ...

The King, 2022 TCC 141 (Informal Procedure)-- summary under Section 133 Summary Under Tax Topics- Excise Tax Act- Section 133 tips included in contract were part of the agreed-to consideration The contract of an incorporated banquet hall with its event customers stipulated: “All Pricing is Subject to 13% HST and 15% Gratuities.” Before agreeing with the position of the Minister that the “gratuity” was part of the consideration for the supply under the contract, Bocock J referred inter alia to U.K jurisprudence that: [V]oluntary gratuities are not subject to VAT because voluntary gratuities are: ‘[N]o part of the contract that the customer should pay a charge for service ….’ ... The almost mandatory tip is enforceable by operation of contract law whereas a voluntary tip is not “consideration” because it is not payable by operation of law…. ...

The Queen, 2008 DTC 4902, 2008 TCC 242-- summary under Subsection 160(1) Summary Under Tax Topics- Income Tax Act- Section 160- Subsection 160(1) The taxpayer acquired the family home in consideration for payment by way of set-off against the amount of a loan that she had made to her husband and her assumption of the mortgage on the property. ... In finding that there had been adequate consideration for s. 160(1) purposes, it was noted that the taxpayer had provided her husband with equivalent consideration by covering other family expenses. ...

The fines were pure fines rather than consideration for parking services. ... C Miller J stated (at para. 26): I have found that the contractual terms of the contract between a non‑paying driver and Simon Fraser University do not provide for consideration for a parking spot, but an agreement by the non-paying driver to run the risk of having to pay a fine. There is not an intention to breach an agreement to pay for the taxable supply of parking; the agreement is not to pay consideration for the supply of the parking spot: the agreement is basically, if I get caught I pay a fine. ...

This sum instead was stated to be paid to them in consideration for their entering into a non-competition agreement with the purchaser. $1,050,000 paid by the taxpayers to the purchaser was stipulated as consideration for the purchaser converting the purchase arrangement to a share purchase. ... In finding that the the full $13,750,000 received was proceeds of disposition of the taxpayers' shares, Favreau J referred (at para. 49) to the Glegg principle that: there is no need to turn to paragraph 68(a)...where the entire amount of consideration received or receivable by a taxpayer from a person can reasonably be regarded as consideration for the disposition of a particular property, namely the shares sold.... ...

He further found that “there has been an evolution in the doctrine of consideration in the context of contract modifications,” so that now “when parties to a contract agree to vary its terms, the variation should be enforceable without fresh consideration, absent duress, unconscionability, or other public policy concerns” (para. 57). ... In rejecting the taxpayers' alternative argument that they had provided consideration for the dividend, he stated (at para. 67): The jurisprudence is conclusive that contributions made to a company by its shareholders do not constitute consideration for the payment of dividends by the company to those shareholders. ...