Search - consideration

Where a contractor who is not acting as agent invoices a customer for reimbursement of an amount, the reimbursement is treated as being part of the consideration for the service supplied by the contractor to that customer. If this service is determined to be a supply of a service that is taxable at seven percent or fifteen percent, as part of the consideration for the service, the reimbursement will also be taxable at seven or fifteen percent, as the case may be. ... As described in the documentation provided, XXXXX was providing a supply of watermain construction and related pressure testing services to XXXXX The water purchased by XXXXX was an input into that supply by XXXXX Even though the invoice by XXXXX to XXXXX included an amount in respect of an item described as XXXXX, that amount was part of the total consideration for the supply of water main construction and related pressure testing services by XXXXX to XXXXX Consequently, as that supply was not exempt, tax was properly charged on that consideration. ...

In its letter of October 16, 1992 to XXXXX, the Department clarified that the municipality's XXXXX contribution to future maintenance costs is also not consideration for a supply in so far as it relates to the specific project originally undertaken under the RSA. Ruling Requested You are requesting a ruling that a payment made by the XXXXX to a railway company for x 100% of the maintenance of a railway crossing is not consideration in respect of a supply, and is not subject to the GST/HST. ... Levstik Legislative References: s. 123(1) "consideration", 165(1)&(2) NCS Subject Code(s)              R 3 ...

Response The $XXXXX special levy is consideration for a taxable supply of a membership. ... The payment is also not consideration for some other supply, because members do not receive anything additional when they pay the special levy. ... Like the original membership fee, the $XXXXX additional payment is consideration for a taxable supply of a membership in a club, the main purpose of which is to provide dining, recreational and sporting facilities. ...

The registrant supplies the property by way of lease to a tenant for consideration in excess of $30,000 annually. ... Nonetheless, the payment of property taxes by a tenant, pursuant to the terms of a lease agreement, constitutes consideration for the lease of property where the landlord has a joint liability to pay such property taxes. ... Should you have any other questions regarding application of the GST/HST, we encourage you to contact your local Tax Services Office at the following address: Technical Interpretation Services XXXXX Yours truly, Hugh Dorward Real Property Unit Financial Institutions and Real Property Division GST/HST Rulings and Interpretations Directorate Legislative References: ETA s. 165(1) 221(1) Reference: XXXXX 10.13, file 11950-1 NCS Subject Code(s): I-11950-1 b.c.c.: XXXXX ANALYSIS: Municipal property taxes paid by a tenant are consideration for the supply of real property by the landlord who is responsible for collecting and remitting tax on the value of consideration, including the amount of tax paid by the tenant to the municipality in respect of the property taxes ...

In addition to the payment for shares, the individual receives a specified sum of money from XYZ company as consideration for agreeing to not compete with XYZ company. Interpretation Requested You have asked for our confirmation as to whether this non-competition payment is consideration for a supply. Interpretation Given Based on the information provided, we consider the non-competition payment to be consideration for a supply. ...

Response Pursuant to subsection 232(2) of the Excise Tax Act (the ETA), where an amount is refunded, adjusted, or credited to a purchaser after the tax has been charged or collected, and the amount of the consideration is subsequently reduced for any reason, the supplier may, in or within four years after the end of the supplier's reporting period in which the consideration was so reduced, refund or credit to the purchaser the tax calculated on the amount by which the consideration was so reduced. ... If a supplier, whose computerized accounting system is programmed to adjust his GST liability for the GST collected on the subsequent reduction in consideration with respect to returned goods, in circumstances such as described in this case, does not issue a credit note containing the prescribed information, he is not in compliance with the provisions of subsection 232(2) of the ETA. ...

Explanation While fees paid to XXXXX for "no shows" and "cancellations" are not consideration for supplies, they are amounts other than consideration that are made as a consequence of the breach or termination of agreements for the making of taxable supplies (other than zero-rated supplies) by a registrant. ... It deems 7/107 (or 15/115) of the amount paid for a no show or cancellation to be consideration for the intended taxable supply of the service of providing a medical report. Subsection 182(1) deems the recipient of the supply to have paid and XXXXX to have collected GST or HST on that deemed consideration at the time the fee is paid. ...

Are the contributions made by XXXXX and its employees to the XXXXX established by XXXXX consideration for a supply? ... Contributions made by the XXXXX under The XXXXX established by XXXXX are not consideration for a supply. ... Contributions made by XXXXX and its employees to the XXXXX established by XXXXX are consideration for a supply. ...

In the context of the GST, "consideration" generally means the amount paid or payable to a supplier by the recipient of the supply. In all cases, in order to be consideration, the amount must be payable for a supply. ... Consequently, the amount paid by the lease operator to XXXXX as termination penalty fees is not consideration for a supply. ...

Rationale: Subsection 123(1) of the ETA states, in part, that a "recipient" of a supply of property or a service means: (a) where consideration for the supply is payable under an agreement for the supply, the person who is liable under the agreement to pay that consideration, (b) where paragraph (a) does not apply and consideration is payable for the supply, the person who is liable to pay that consideration. ... Therefore, the determination must be made as to whether the amount charged by the registrant represents consideration only or consideration and tax. ... The administrative fee is subject to tax as it is consideration for a supply of a service made in Canada from CANCO to the O/O. ...