Search - consideration

A gift certificate is a device (e.g. voucher, receipt, ticket): • that usually has a monetary value or is for a supply of property or service, • that can be redeemed on the purchase of property or a service from a particular supplier; i.e. the supplier agrees to accept the device as consideration, or a part thereof, towards the purchase of property or a service, • for which consideration was given, and • that has no intrinsic value. Section 181.2 provides that, for GST/HST purposes, the issuance or sale of a gift certificate (including a gift card that meets the criteria of a gift certificate) for consideration is deemed not to be a supply and, when given as consideration for a supply of property or a service, the gift certificate is deemed to be money. ... Therefore, a GST/HST registrant merchant of a particular establishment who accepts a gift certificate as a method of payment is required to account for the GST/HST payable by the customer on the value of the consideration charged in respect of the taxable supply (other than zero-rated) of their goods or services. ...

Issue Are the early withdrawal fees considered to have been acquired from the segregated fund by the insurer pursuant to paragraph 131(1)(c) or are the early withdrawal fees consideration for "the amount of a redemption" pursuant to paragraph 131(2)(a)? Our comments Paragraph 131(1)(c) deems amounts deducted from segregated funds to be "a taxable supply of a service and the amount shall be deemed to be consideration for the supply that becomes due at the time". ... Accordingly, the amount transferred out of the segregated fund into the general fund is an exempt supply pursuant to paragraph 123(1)(f) of the definition of financial service. •   The redemption fee paid by the insured to the insurer by means of deduction from the general fund of the insurer constitutes consideration for "the transfer of ownership or repayment of a financial instrument" pursuant to paragraph 123(1)(d) of the definition of "financial service". ...

Ruling Requested You would like confirmation that XXXXX is required to collect the GST/HST on the consideration it charges insurance companies for the supply of IME reports. ... The tax is calculated on the value of the consideration for this supply which is the total amount charged by XXXXX to the insurance companies. That is, the value of the consideration includes the recovery of XXXXX expenses incurred to make this supply and its arranging or set-up fee. ...

It states, "Where a lessee is obligated under the terms of a lease agreement to pay the lessor for any shortfalls below the guaranteed amount in the vehicle's value at the termination of the lease period, any shortfall in that amount is considered for GST purposes to be additional consideration paid in respect of the vehicle." Section 152 outlines when the consideration for a taxable supply is due. Subsection 152(2) applies specifically to the consideration for a taxable supply when the supply is made under a lease agreement: "Notwithstanding subsection (1), where property is supplied by way of lease, licence or similar arrangement under an agreement in writing, the consideration, or any part thereof, for the supply shall, for the purposes of this Part, be deemed to become due on the day the recipient is required to pay the consideration or part to the supplier pursuant to the agreement. ...

Based on the facts set out above, we rule that the equalization payments by the XXXXX are consideration for an exempt supply pursuant to subparagraph 189(a)(i) of the ETA and therefore XXXXX is not required to collect tax on these payments. ... In our view, the amounts paid by the producers at issue represent membership dues and therefore consideration for that deemed exempt supply to the members, notwithstanding that the amount is paid by the producers. That is, pursuant to the terms of the collective agreement, the producers have undertaken to pay part of the consideration for services (deemed to be exempt) provided by the union to its members. ...

The consideration charged by XXXXX includes an amount for the reimbursement of the medical practitioner's charges and an amount in respect of XXXXX fee for providing this service. ... The tax is calculated on the value of the consideration for this service which includes the amount for the reimbursement of the medical practitioner's charges and an amount in respect of XXXXX fee. ... As there are no exempting provisions in the ETA that apply, the HST at the rate of 15% is collectible on the consideration charged by XXXXX for facilitating the medical examinations and drug screening tests. ...

In addition, where a non-profit organization's total revenues from taxable supplies in a particular calendar quarter exceed the small supplier threshold of $50,000, the non-profit-organization ceases to be a small supplier immediately before the consideration becomes due or is paid for the particular taxable supply that puts the person over the $50,000 small supplier threshold. ... These "allowable benefits" are: 17(a)           the right to receive an indirect benefit intended to accrue to all members collectively; 17(b)           the right to receive investigation, conciliation, or complaint-settlement services supplied by the body for issues involving members; 17(c)           the right to vote at or participate in meetings; 17(d)           the right to receive or acquire property or services for consideration equal to the fair market value of the property or services at the time the supply is made; 17(e)           the right to receive a discount on the fee paid for a supply provided by the organization where the total value of all such discounts to which a member is entitled is insignificant in relation to the membership fee; and 17(f)           the right to receive periodic newsletters, reports or publications for which the value is insignificant in relation to the consideration paid for the membership, or that provide information on the activities of the body or its financial status, other than newsletters, reports or publications the value of which is significant in relation to the consideration for the membership and for which a fee is ordinarily charged by the body to non-members. ... That is, subsection 188(3) provides that where a competitor in a competitive event contributes an amount to the prizes to be given to competitors, the contribution shall be deemed not to be consideration for a supply and no GST will apply. ...

In the present situation, it is our view that the Communication Packages and the accommodation are not provided for a single consideration. That is, separate consideration is payable for each of the Communication Packages. ... Accordingly, since separate consideration is charged for the Communication Packages, the provisions of section 138 cannot apply to deem them to be part of the supply of accommodation. ...

Ruling Given Based on the facts set out above, we rule that the payments made by the City to the contractors with respect to the XXXXX system are consideration for a taxable supply. Pursuant to subsection 165(1) of the ETA, the City as recipient of a taxable supply is required to pay tax in respect of the supply calculated at the rate of 7% on the value of consideration for the supply. ... Your submission referred to the possibility that the payments made by the City to contractors under the XXXXX system were grants made in the public interest and not consideration for a taxable supply. ...

EXPLANATION Pursuant to subsection 165(1), every recipient of a taxable supply made in Canada shall pay tax in respect of the supply calculated at the rate of 5% on the value of the consideration for the supply. Pursuant to subsection 165(2), every recipient of a taxable supply made in a participating province shall pay in addition to the tax imposed by subsection 165(1), tax in respect of the supply calculated at the rate of tax for that province (Ontario 8%) on the value of the consideration for the supply. ... The rebate is not a reduction in consideration for the supply of electricity, nor is it a reduction to the HST payable in respect of the supply of electricity.   ...