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Deemed Dividend As discussed in paragraph 1 of Interpretation Bulletin IT-489R Non-Arm's Length Sale of Shares to a Corporation, section 84.1 of the Act contains rules concerning a non-arm's length disposition of shares to a corporation for consideration which generally includes shares of the corporation. ... Where the provisions of subsection 84.1(1) apply, there may be a reduction of the paid-up capital of the shares of the transferee corporation issued as consideration or the transferee corporation may be deemed to have paid a dividend to the transferor taxpayer. ... Nonetheless, the effect of the provisions of section 84.1 will not apply where the sum of the non-share consideration and the paid-up capital of the share consideration does not exceed the greater of: the paid-up capital of the transferred shares, and the transferor's "arm's length adjusted cost base" of the transferred shares. ...

This is also consistent with the general premise that, upon incorporating any type of business, an important consideration is that business profits must be paid out in the future as dividends. ... Under paragraph 219(1)(l), the non-resident corporation must decide how much non-share consideration to take back upon incorporating its Canadian business; this amount will determine how much branch tax is payable at that time. ... Clearly, had the non-resident corporation elected to take back non-share consideration upon incorporating its Canadian branch, the amount of that non-share consideration would be subject to branch tax. ...

Step 2: ParentCo subscribed for 100 common shares of Newco for cash consideration of $100. ... Step 6: ParentCo transferred the TargetCo New Preferred Shares to Newco in consideration for additional common shares of Newco. Step 7: TargetCo redeemed all of the TargetCo New Preferred Shares held by Newco in consideration for a promissory note (“Note 1”) Step 8: Newco redeemed all of the Newco Preferred Shares held by TargetCo in consideration for a promissory note (“Note 2”) Step 9: Note 1 and Note 2 were set-off against one another. ...

Paragraph 212(1)(d) imposes a 25% withholding tax on the gross payment to a non-resident if the payment is "rent, royalty or similar payment, including, but not so as to restrict the generality of the forgoing, any payment", inter alia, (i) for the use of or for the right to use in Canada any property, invention, trade-name, patent, trade-mark, design or model, plan, secret formula, process or other thing whatever; (ii) for information concerning industrial, commercial or scientific experience where the total amount payable as consideration for that information is dependent in whole or in part on, inter alia, production or sales of goods or services; (iii) for services of an industrial, commercial or scientific character performed by a non-resident person where the total amount payable as consideration for those services is dependent in whole or in part on, inter alia, production or sales of goods or services; and (v) that was dependent on the use of or production from property in Canada whether or not it was an instalment on the sale prices of the property, but not including an instalment on the sale price of agricultural land. ... Royalties Article XII(4) of the Treaty defines the term "royalties" to mean "payments of any kind received as a consideration for the use of, or the right to use,..., any patent, trade mark, design or model, plan, secret formula or process,...or for information concerning industrial, commercial or scientific experience,... ...

A entered into the Lease with an oil company whereunder the Property was leased to the oil company for the purpose of drilling petroleum in consideration for an upfront bonus payment and a right to receive royalty payments based on the value of future production from the well (the "Royalty"). 3. ... Generally, when a taxpayer enters into such a lease with an oil company, he disposes of the right to drill for petroleum and receives consideration that includes the fair market value of the Royalty and the upfront bonus. Provided that the Property qualified as CRP, the consideration received by Mr. ...

However, in a typical petroleum and natural gas lease, the lessor grants the oil and gas company the exclusive right to explore for, drill for and take the petroleum, natural gas and related hydrocarbons that occur on or under a particular parcel of land in return for consideration consisting of lump sum rental payments and bonus payments. Since a CRP is defined as including any right, licence or privilege to explore for, drill for or take petroleum, natural gas or related hydrocarbons in Canada, we believe that the consideration received by the lessor for entering into such a lease should be treated as proceeds of disposition of a CRP. ... Consequently, your CCOGPE balance should be reduced by the consideration received from the corporation. ...

16 June 2016 External T.I. 2015-0623031E5 F- Application of paragraph 7(1)(b) CRA Tags 7(1)(b) 7(1.7) Principales Questions: 1) Whether an amount retained by the corporation from the agreed price is included in the value of the consideration for the disposition pursuant to subparagraph 7(1)(b)(i) if the payment of the retained amount could be reduced due to a lawsuit? 2) If the value of the consideration in paragraph 7(1)(b) includes the retained amount and results in a benefit for an employee in the year of the disposition of the stock option, can the employee request an amendment of his/her income tax return for the year of the disposition if the employee does not receive the full retained amount in a subsequent year? ... Raisons: 1) The expression "value of the consideration for the disposition" is broadly interpreted to include an amount which has not been received by an employee in the year of the disposition of the stock option. 2) The initial assessment during the year of disposition of the stock option by the employee is correct in law. 2015-062303 XXXXXXXXXX Lucie Allaire, LL.B, CPA, CGA, D. ...

The POD is equal to the consideration received, in this case the total of cash and the market value of shares acquired in exchange for the claim. 2. ... In exchange for the mining claim, Canco receives as consideration cash and common shares of the mining company. ... The expression “sale price” is not defined in the Act, but is generally accepted to mean the actual value of all consideration received by a seller from a buyer, including cash, property and/or the assumption of liabilities. ...

Our Comments Subject to certain conditions and limits, section 20.01 of the Income Tax Act (the "Act") allows a sole proprietor to deduct as a business expense amounts paid as a premium, contribution or other consideration under a PHSP in respect of the sole proprietor, his or her spouse or common-law partner, or members of his or her household. ... Therefore, it must represent (i) an undertaking by one person, (ii) to indemnify another person, (iii) for an agreed consideration, (iv) from a loss or liability in respect of an event, (v) the happening of which is uncertain. ... However, a cost-plus plan under which the administrator agrees to reimburse the sole proprietor, his or her spouse and members of his or her household for actual medical and hospital expenses and receives, as consideration, an amount equal to the amount reimbursed plus an administrative fee, does not qualify as a PHSP since it does not contain the necessary elements of insurance. ...

Provided a minimum of XXXXXXXXXX travelers are confirmed on a particular excursion, as consideration for the foregoing services, the Company will pay the travel costs on behalf of one tour host. ... Generally, an amount paid to an individual as consideration for services rendered will be taxable either as income from an office or employment or as income from a business depending on the particular circumstances. ... Accordingly, the value of all consideration received for services provided to the Company should be treated as business income. ...