Search - consideration

In rejecting the Appellant’s submission that it “made, in consideration of the Annual Resort Fee, separate single supplies of services in respect of each Vacation Home,” D’Arcy J stated (at para. 259): It made a single supply by agreeing to use the Annual Resort Fee to fund its operations…with the consideration being based upon the Appellant’s total estimated costs. ...

Stock ‘94 Szolgáltató Zrt. v Regional Customs and Finance Directorate-General for Southern Transdanubia of the National Tax and Customs Office, Hungary, [2016] BVC 45, C-208/15 (European Court of Justice (5th Chamber))-- summary under Supply Summary Under Tax Topics- Excise Tax Act- Section 123- Subsection 123(1)- Supply interest on loan to fund taxable supply was part of taxable consideration A Hungarian company was set up to assist Hungarian farmers by lending them money to fund the purchase by them from it of current assets needed in their business. The European Court of Justice (subject to some further findings of facts to be made by the local court) essentially applied the single supply doctrine to find that the loan interest was part of the consideration for the sale of products by the company to the farmers, so that the interest was subject to VAT (even though, of course, interest on loans viewed as being for a separate supply was VAT-exempt). ...

Canada, 2002 FCA 237-- summary under Subsection 153(2) Summary Under Tax Topics- Excise Tax Act- Section 153- Subsection 153(2) 50-50 allocation of consideration for two supplies made to arm’s length customers It was accepted that the appellant, who operated a “brew-your-own” beer and wine business, was providing separate supplies: the zero-rated sale of ingredients for making the beer or wine: and a taxable supply of its facilities and services to assist its customers in brewing the beer or wine. ... In affirming this decision, Evans JA stated (at para. 2): [S]ubsection 153(2), provides that the consideration for multiple supplies must be allocated reasonably among the supplies. ...

The Queen, 2017 TCC 78, rev'd in part 2019 FCA 217-- summary under Supply Summary Under Tax Topics- Excise Tax Act- Section 123- Subsection 123(1)- Supply dominant element of service provided by financing SPV was financing The manager of various mutual funds (the “Funds”) agreed to relinquish its receipt of a portion of the management fees which it otherwise would have earned (calculated as a percentage of the net asset values from time to time of the funds) and the Funds agreed to pay the same percentage amounts to a special purpose non-resident Citibank-formed vehicle (“Funding Corp”) in consideration for Funding Corp paying the brokerage commissions that were payable on subscriptions by investors for units (or shares) of the Funds. ... Before going on to find that the amounts of the fees so assigned to Funding Corp were deemed by paragraph (q) of the “financial services” definition to be taxable consideration, V.A. ...

He further found that “there has been an evolution in the doctrine of consideration in the context of contract modifications,” so that now “when parties to a contract agree to vary its terms, the variation should be enforceable without fresh consideration, absent duress, unconscionability, or other public policy concerns” (para. 57). ...

Crean v Canada (Attorney General), 2019 BCSC 146-- summary under Subsection 84.1(1) Summary Under Tax Topics- Income Tax Act- Section 84.1- Subsection 84.1(1) share sale for Newco note generated s. 84.1 dividend before its rectification The executed documents indicated that an individual (Thomas) sold his shares of a corporation (Crean Holdings) to the Newco of his brother (Michael) in consideration for a promissory note of the Newco. ... Supreme Court for a rectification order redoing the written agreement to provide that Thomas sold his shares to Michael directly for a promissory note, and that there was an immediate on-sale by Michael of those shares to his Newco in consideration for it assuming the promissory note. ...

Canada, 2019 FCA 217-- summary under Paragraph (l) Summary Under Tax Topics- Excise Tax Act- Section 123- Subsection 123(1)- Financial Service- Paragraph (l) dominant element in MFT commission funding arrangement was the payment, or the arranging of payment, of the funding A non-resident bank ("Citibank") agreed to fund the payment of the upfront brokerage commissions that were payable on the issuance of units in the Invesco/Trimark funds (the “Funds”) in consideration for receiving an assignment of a portion of the amounts that otherwise would have been earned by the Invesco manager as management fees. More precisely, the manager agreed to reduce its management fees (i.e., reduce its percentage charge of NAV), and the Funds agreed to pay the same percentage amounts to a special purpose non-resident Citibank-formed vehicle (“Funding Corp”) essentially in consideration for Funding Corp paying the brokerage commissions. ...

One of the unsuccessful arguments made by the Crown in seeking to uphold a s. 160 assessment of Newco was that the determination as to whether full consideration had been paid by Newco should be determined by the “overall result” produced by the series of transactions (para. 45). In rejecting this submission, Noël CJ stated (at para. 58) that “the adequacy of the consideration given must be measured against the value of the property transferred by way of a ‘snapshot’ taken at the point in time when the transfer takes place.” ...

He further found that charges made by DTI at the end of each trip to the drivers of $0.76 per mile for fuel, and $0.08 per mile for vehicular maintenance, were consideration for an on-supply by DTI to the drivers of fuel and maintenance services. In finding that such fuel and diesel supplies were not consideration for a zero-rated supply by DTI, Russell J noted that such supplies were not part of the “freight transportation service” (“FTS”) made by each driver to DTI (given that the recipients of the diesel and maintenance supplies (the drivers) differed from the recipient of the FTS (i.e., DTI). ...

Bowie J stated (at para. 13): [O]nly an insurance company licensed to do so may sell insurance, and only a provincial government may sell motor vehicle licences… He also did not agree that separate consideration needed to be received for the insurance and licences, stating (at para. 14): I know of no reason that would prevent [Libra] from supplying its services as an agent to obtain licences and insurance along with other services for a single consideration. ...