Search - consideration

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). ...

MNR, 53 DTC 338 (ITAB)-- summary under Paragraph 6(3)(e) Summary Under Tax Topics- Income Tax Act- Section 6- Subsection 6(3)- Paragraph 6(3)(e) On the sale of shares of a company of which the taxpayer was the controlling shareholder ("Company A") for $540,000, Company A agreed to pay the taxpayer $250,000 per month for 20 years in consideration for his agreement not to engage in the lobster business in two particular counties during the 20-year period. Almost ten years later, a new company ("Company B", of which the taxpayer eventually became the president) was formed, purchased the assets of Company A and assumed the obligation to continue paying $250 per month to the taxpayer in consideration for his covenant to continue observing the non-compete covenant. ... Monet found that neither Company B nor the taxpayer were engaged or even interested in the lobster business, that the covenant was inserted only to make the obligation to make the monthly payments legally enforceable, and that the payments received by the taxpayer from Company B were not paid to him in consideration or partial consideration for the non-compete covenant. ...

.)-- summary under Financial Service Summary Under Tax Topics- Excise Tax Act- Section 123- Subsection 123(1)- Financial Service The taxpayer argued that the credit card charges owing to it by cardholders arose as a result of an assignment of debts or other rights to it by the relevant retailers, and that the payments made by the taxpayer to the retailers accordingly represented the cash consideration for a supply by the retailers to it, rather than the consideration for the provision of a financial service by the taxpayer to the retailers (the Crown having conceded that the payment of money as the consideration for a supply of goods or services is not itself a supply). ... In any event, having regard to the reality created by the terms of the three-party arrangements, there was a supply of a financial service by the taxpayer to the retailers, namely, the service of assuring payment of the retailers in consideration for the earning of a discount from the face amount of the accounts by the taxpayer. ...

The Advocate General (representing Revenue and Customs) v K E Entertainments Ltd (Scotland), [2020] UKSC 28-- summary under Equal Treatment Summary Under Tax Topics- Statutory Interpretation- Equal Treatment a single lawful method of apportionment of consideration fostered principle of equal treatment After finding, contrary to one of the taxpayer’s submissions, that there was only one method for determining the quantum of consideration that it received that represented consideration for its taxable supplies of access to the bingo games hosted by it, Lord Legatt stated (at para. 31-32): In matters of taxation consistency of approach is of critical importance. ... In the case of a pan-European system of taxation such as VAT, there is an additional consideration that recognising more than one method of apportionment as lawful could result in inequality in competition between businesses situated in different member states. ...

However, it was precluded by statute from going back more than three years with its refund claims – but there was no such time limitation where a repayment of VAT was claimed based on there being “a decrease in consideration for a supply.” Before rejecting the taxpayer’s argument that its change in calculating the consideration for its supplies involved a “decrease in consideration,” so that it could go back more than three years, Lord Legatt stated (at para. 30) that it was “clear that there can be only one correct method of calculating the taxable element of fees charged to customers for playing cash bingo and … this was the session by session method and not the game by game method.” Since there was only one correct method, on this basis as well the taxpayer’s claim that its switch in method entailed a decrease in the consideration payable by it foundered. ...

In reversing the decision below, and finding that the exemption applied, Marcotte JCA noted that “sale” was broadly defined in s. 2(9) of the RSTA to include “any other contract whereby, for a price or other consideration, a person delivers or binds himself to deliver, to another, movable property.” After quoting Waddams, The law of contracts, as to the meaning of “consideration” under the common law, she stated (at para. 57, TaxInterpretations translation): In this case, by transferring its environmental obligations to the Receivers, the Appellant relieved itself of various environmental obligations or liabilities. In my view, this relief conferred a benefit on the Appellant and … constituted valuable consideration that may be characterized as "any other consideration" within the meaning of section 2(9) of the RSTA. ...

Perram and Jackman JJ stated (at para. 11) that “where parties to a conveyance have agreed the purchase price for a transfer on sale then the consideration for the transfer is that agreed price” and that the “ordinary meaning of the language used by the parties [in the EBA] … suggests that what was to be paid by the Bottler to PepsiCo/SVC or their nominated seller was a price being paid for the concentrate and therefore ‘as consideration for’ the sale of the concentrate” (para. 13). ... Thus, “the payments made by the Bottler to the Seller did not include an element which was a royalty for the use of the trade marks (since the payments were not in consideration for the right to use the trade marks)” (para. 37), so that no withholding tax could be imposed by the Commissioner on such consideration. ... It follows … that the amounts provided for by the EBAs as the prices for units of concentrate were partly amounts in consideration for the use of the trade marks which the Bottler was licensed to use. ...

.)-- summary under Computation of Profit Summary Under Tax Topics- Income Tax Act- Section 9- Computation of Profit A corporation purchased various assets including inventory in consideration for the payment of £10,500 and the issue of 29,997 fully-paid shares with a par value of £1 each. ... Accordingly, when fully paid shares are properly issued for a consideration other than cash, the consideration moving from another company must be at the least equal in value to the par value of the shares and must be based on an honest estimate by the directors of the value of the assets acquired. ...

ING Intermediate Holdings Ltd v HMRC, [2017] EWCA Civ 2111-- summary under Subsection 153(1) Summary Under Tax Topics- Excise Tax Act- Section 153- Subsection 153(1) interest paid by bank to depositors was reduced by implied fees earned as consideration going to the bank Although accepting (per BLP) that a mere borrowing by a company is not a supply by it, Arden LJ confirmed the finding below that the services provided by ING to its on-line depositors (including 24-hour access to their deposits) were more than merely “peripheral” to the borrowing represented by the deposits, so that ING was engaged in an exempt banking business. In finding that ING was also making such supplies for consideration notwithstanding that it advertised itself as providing “no fee” banking, she stated (at para. 46, adopting findings below): [T]he contract was one of barter. The bank provided the banking facilities and interest payments in exchange for the making of the loan. … The provision by the customer of the loan was the consideration for both the payment of interest and the provision of the banking services. ...

Autoridade Tributária e Aduaneira (2018), ECLI:EU:C:2018:942 (ECJ (5th Chamber))-- summary under Subsection 182(1) Summary Under Tax Topics- Excise Tax Act- Section 182- Subsection 182(1) fee for early termination of services contact was consideration for the service Subscribers to the services of a Portuguese telecommunications company (“MEO”) agreed to pay for a minimum subscription period, and when they discontinued service before the end of that guaranteed period they were required under the terms of their contracts to pay a lump sum equal to their monthly subscription fee multiplied by the number of remaining months in the guaranteed period. The ECJ found that this lump sum was taxable “consideration” received by MEO for its services on ordinary principles, stating (para. 45): [I]t must be held that the consideration for the amount paid by the customer to MEO is constituted by the customer’s right to benefit from the fulfilment, by MEO, of the obligations under the services contract, even if the customer does not wish to avail himself or cannot avail himself of that right for a reason attributable to him. ...