Search - consideration

28 March 2018- 11:37pm Stewardship Ontario – Tax Court of Canada finds that statutorily-mandated waste recycling charges were consideration for a taxable supply Email this Content Stewardship Ontario (“SO”) was a not-for-profit corporation that operated, as part of a regime governed by the Waste Diversion Act, 2002 (Ontario), an Ontario program for recycling various types of waste such as paints, solvents, batteries, empty propane tanks and antifreeze. ... As to the Crown’s argument that the “Steward Fees” were a “regulatory charge” rather than a “user fee,” he stated that they were payable by “operation of law” (i.e., under the Waste Diversion Act) and thus came within the definition of consideration. ... The Queen, 2018 TCC 59 under ETA s. 123(1) – supply, consideration, service, s. 141.01(2). ...

10 July 2019- 12:01am National Car Parks – Court of Appeal of England and Wales finds that car park machines that did not refund coin payments thereby received extra consideration for VAT purposes Email this Content A customer pays for parking in a car park by going to the ticket machine which, on its tariff board, displays a price for one hour of £1.40 – but also states that change is not given. ... In finding that the consideration received by the car park owner (NCP) for VAT purposes was £1.50, and rejecting NCP’s submission that £0.10 was a gratuitous payment, Newey LJ stated: The best analysis would seem to be that the contract was brought into being when the green button was pressed. ... Summary of National Car Parks Ltd v Revenue and Customs [2019] EWCA Civ 854 under ETA s. 123(1) – consideration. ...

19 January 2022- 10:43pm 9056-2059 Québec – Tax Court of Canada finds that ETA s. 153(2) requires a reasonable allocation of consideration between component supplies Email this Content In order to promote the sale of its farm products (mostly honey), the appellant developed a “labyrinth” of trails on its forest lands and, when it sold tickets for access by visitors to the trails, stipulated that the ticket, generally sold for $12, also constituted a coupon of $1.50 to be applied to the purchase of honey or other products. ... Before confirming the resulting reassessments that treated $1.50 of the ticket prices as being zero-rated consideration for the honey or other food products, and the balance as consideration that was subject to tax, Boyle J indicated that s. 153(2) required that the “cost of admission to … the … forest must be reasonably divided between access to the labyrinth and other activities, and the mandatory purchase of a coupon to be exchanged for a honey or maple food product,” and then stated: Appellant was unable to present any valid reason why the value of the initial coupon should be other than $1.50, which is what it charged for the same coupons when purchased individually. ...

9 January 2023- 11:39pm CRA confirms that shares issued to a Canadian parent in consideration for it issuing shares on a Delaware merger had a cost equal to such shares’ FMV Email this Content The acquisition of a non-resident target (Target) by a Canadian corporation (Opco) and its Canadian parent (Parent) entailed: Parent forming two new stacked non-resident subsidiaries (Merger Sub1 holding Merger Sub2); Merger Sub2 being merged into Target with Target being the survivor, with the shareholders of Target having their shares converted into shares issued by Parent and cash paid by Merger Sub1 (which it had borrowed from Opco) and with Merger Sub1 becoming the parent of Target; and Merger Sub2 then immediately being merged into Merger Sub1 with Merger Sub1 as the survivor. In order that Parent could get basis for having issued the share consideration, it was stated in a funding agreement to have issued such shares in consideration for the issuance to it by Merger Sub1 of common shares of Merger Sub1 – and CRA ruled that indeed those shares issued to Parent had a cost to it equal to the FMV of the shares issued by it in turn to the Target shareholders plus any related costs incurred by it. ...

18 August 2012- 7:34pm CRA gives s. 84(2) ruling on distribution of share consideration received for sale of a business Email this Content CRA ruled that where a Canadian public corporation transfers a Canadian business to a Newco, and sells Newco to a public company purchaser in consideration for equity of the purchaser, it can then distribute that equity to its shareholders, without there being a deemed dividend by virtue of the exemption in s. 84(2) (PUC distribution on the discontinuance or reorganization of a business). ...

10 June 2014- 10:35am True North Apartment REIT to acquire apartments from Drimmer in consideration for traditional exchangeable LP units Email this Content Subsidiary LPs of True North Apartment REIT are proposing to acquire 29 apartment buildings from entities owned by Daniel Drimmer (who also is its CEO and owns its manager) for consideration including exchangeable LP units, so that the effective interest of Drimmer in the REIT will increase from 18.9% to 41.2%. ...

27 December 2012- 12:40pm Pacific Rubiales includes nominal cash in consideration for acquisition of C&C Energia in order to enhance bump Email this Content C&C Energia is spinning-off 95% of the shares of a newly-formed exploration subsidiary (Platino Energy), followed by an acquisition of all the C&C Energia shares by Pacific Rubiales in exchange for Pacific Rubiales shares (representing 7% of its shares in aggregate) and nominal cash consideration – so that no rollover treatment is available unless the C&C Energia shareholders make a joint s. 85 election with Pacific Rubiales. ...

10 September 2015- 9:35pm CRA considers that contributions of capital to a trust may constitute consideration Email this Content The definition of a personal trust refers inter alia to "an inter vivos trust no beneficial interest in which was acquired for consideration payable directly or indirectly to…the trust. ...

15 January 2015- 7:54am CRA recognizes that a transfer for nominal consideration can be a gift Email this Content When asked whether a transfer of an immovable for $1 to a non-arm’s length person can be a gift, CRA responded that, in the absence of sham "the genuine legal relations must be respected in tax matters" – which sounds generally favourable. Note also that in ITTN No. 44, CRA stated, apparently based on s. 69(1)(c) re "gifts," that "a corporation that receives property from its shareholder for no consideration has a cost basis for that property equal to its FMV. ...

14 November 2017- 10:10pm CRA rules that the Ontario electricity rebate does not reduce the consideration for the supply Email this Content There currently is an 8% rebate under the Ontario Rebate for Electricity Consumers Act, 2016 equal to the provincial portion of HST on the electricity bills of residential, farm, small business and other eligible customers. CRA has ruled that the rebate is financial assistance and does not reduce the consideration for the supply of the electricity nor the HST itself – so that input tax credits or public service body rebate claims of the recipient are not reduced by the rebate amount. ...