Search - consideration

The Queen, 2018 TCC 59-- summary under Subsection 141.01(4) Summary Under Tax Topics- Excise Tax Act- Section 141.01- Subsection 141.01(4) s. 141.01(4) deems free supplies to be taxable or exempt supplies In the course of a general discussion, D’Arcy J stated (at para. 76): Generally speaking, property or services that are used in the making of supplies for no consideration or nominal consideration are deemed to be used to make either taxable supplies for consideration or exempt supplies. ...

The Queen, 2006 DTC 3006, 2006 TCC 256-- summary under Subsection 97(2) Summary Under Tax Topics- Income Tax Act- Section 97- Subsection 97(2) partnership subscription for taxpayer affiliate pref shares not boot The taxpayer transferred assets of a business to a partnership in what was intended to be an s. 97(2) rollover transactions in consideration for cash, promissory notes and assumption of debt ("boot") totalling an amount less than the cost amount of the transferred assets, and a Class "F" partnership interest stipulated to have a value equal to the balance of the purchase price. ... In finding that the $18.7 million payment made by the Partnership to Holdings ostensibly as consideration for preference shares of Holdings was not additional consideration to the taxpayer for the business assets transferred by it to the Partnership, Bonner J. noted (at p. 3012) that the Crown had admitted in its pleadings that the Class F units received by the taxpayer together with the boot was equal to the fair market value of the transferred assets. Accordingly there was "no room for even a penny of additional consideration when the legal form of the transaction governed". ...

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. ...

Revenu Quebec assessed on the basis that this was consideration for taxable supplies by the City, notwithstanding that a supply of such services to the parents would have been exempt under Sched. ... She found (at para. 54) that where (as here) "there is a direct link between the subsidy and the price of the service, the subsidy must be regarded as the consideration, or part of the consideration, for the service, and it is taxable if the service is taxable." However, as it was accepted that the supply was exempt under s. 12, that consideration was not taxable. ...

.)-- 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. ...

After noting (at para. 4) that "‘consideration' should be understood to include anything that would be consideration under the law of contract," Sharlow JA rejected the primary position of Costco that the amounts received by it from Amex were rebates of the merchant discount fees earned by Amex, noting that it was more consistent with the wording of the Co-Branding Agreement to consider such amounts as consideration for Costco entering into the Co-Branding Agreement or, more specifically, for the exclusivity provision. ... Words and Phrases consideration ...

The Queen, 2017 TCC 75-- summary under Subsection 171(1) Summary Under Tax Topics- Income Tax Act- Section 171- Subsection 171(1) Tax Court had jurisdiction to consider change to description of consideration in s. 97(2) election form R & S Industries was unsuccessful in a motion to have the Federal Court direct CRA to reconsider its decision to not permit R & S Industries to file an amended s. 97(2) election form so as to change the agreed amounts. R & S then appealed to the Tax Court with a view to convincing the Court that the allocation of consideration between partnership-interest and non-partnership interest consideration set out on the (T2059) election form did not reflect the actual agreed allocation. ... Graham J considered that there was a crucial distinction between the T2059’s agreed amounts, which could not be altered by the Minister, and the allocation of the consideration, which was a purely factual matter which was merely recorded on the T2059, and which either CRA or the taxpayer were free to challenge in the Tax Court as not according with the actual facts. ...

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. ...

The King, 2022 TCC 141 (Informal Procedure)-- summary under Section 133 Summary Under Tax Topics- Excise Tax Act- Section 133 tips included in contract were part of the agreed-to consideration The contract of an incorporated banquet hall with its event customers stipulated: “All Pricing is Subject to 13% HST and 15% Gratuities.” Before agreeing with the position of the Minister that the “gratuity” was part of the consideration for the supply under the contract, Bocock J referred inter alia to U.K jurisprudence that: [V]oluntary gratuities are not subject to VAT because voluntary gratuities are: ‘[N]o part of the contract that the customer should pay a charge for service ….’ ... The almost mandatory tip is enforceable by operation of contract law whereas a voluntary tip is not “consideration” because it is not payable by operation of law…. ...

The Queen, 78 DTC 6272, [1978] CTC 395 (FCA)-- summary under Subsection 15(1) Summary Under Tax Topics- Income Tax Act- Section 15- Subsection 15(1) dividend satsified share purchase consideration The appellant majority shareholder of a company, who agreed to purchase the shares held in the company by a minority shareholder in consideration of having the company first pay a dividend to the minority shareholder of $350,050, was found to have received a benefit of $350,050 in that the payment of the dividend satisfied his obligation to pay the price of the shares. ... The value of what he acquired in consideration of the debt or obligation is really irrelevant". ...