Taxable Supply

See Also

Aubrett Holdings Ltd. v. The Queen, [1998] GSTC 17 (TCC) (Informal Procedure)

The sale of the assets of an insurance agency business did not represent a taxable supply because it was not made in the course of a business of the vendor.

Administrative Policy

25 February 2016 CBA Roundtable, Q. 7

dentists jointly employ staff so as to avoid GST

A group of dentists, who are not in partnership, wish to share the costs of staff such as receptionists and bookkeepers and also are shared employers of the staff, so that all of the staff remuneration paid by each dentist is exempted from GST/HST as a result of being paid qua employer. One of the dentists does the remittances, and source deduction and T4 reporting, as agent for the other dentists as well as on her own behalf - and also pays the staff remuneration as agent and is reimbursed on a pro rata basis by the other dentists. In commenting on the payroll reimbursement arrangements, CRA stated:

We consider the person who is acting on behalf of the group to be the agent of the other dentists. As the agent can recover the respective portions of the remittance from the other dentists, we consider that the agent is being reimbursed for amounts it pays on behalf of these other dentists, who would be considered to be principals. A reimbursement of this nature is not payment for supplies made by the agent. The reimbursement to the agent would not constitute consideration for a supply and would not be subject to GST/HST.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 96 arrangement for sharing employees not a partnership in Quebec or ROC/profit-sharing arrangement required 234
Tax Topics - General Concepts - Agency dentist handles source deductions and payroll as agent for colleagues 127
Tax Topics - Income Tax Act - Section 153 - Subsection 153(1) - Paragraph 153(1)(a) joint responsibility of joint employers 434
Tax Topics - Excise Tax Act - Section 123 - Subsection 123(1) - Service dentists jointly employ staff so as to avoid GST 296

13 April 2012 Interpretation Case No. 111790

The Corporation facilitated the placement of financing of Product A under conditional sales contracts which would be assigned by the vendor to the fianancial institution and under which title to Product A would not pass to the buyer until all instalments had been made. In response to a question as to whether "the Corporation would have a GST/HST obligation with respect to the sale of [Product A] since the Corporation, in its capacity as an intermediary, would be listed as the Seller on the Contract," CRA stated

Based on the fact that the Lenders would require the Corporation be identified as the Seller on the Contract suggests that the Lenders may presume that the Corporation would hold all the rights and title to [Product A] prior to their acquisition by the Lenders. If this is the case, the Corporation as the supplier of [Product A] would be considered to have made taxable supplies of [Product A] and therefore would have an obligation to charge, collect and remit GST/HST in respect of those supplies.

18 October 2004 Ruling RITS 36388

GST does not apply to reimbursements made by a principal to its agent for amounts paid by the agent on the principal's behalf.

28 May 2004 Ruling RITS 47263

Operating subsidies provided by the Ontario Ministry of Health and Long-Term Care to the operator of a nursing home constituted a grant and not consideration for a supply.

27 March 2000 HQ Letter RITS No. 7940

Where an individual who sells the shares of a company to an unrelated third party also receives consideration for a non-compete covenant, the non-compete payment would be considered to be consideration for a supply made by the individual, but would not qualify as a taxable supply because the individual would not be engaged in commercial activity.

3 November 2000 Headquarter Letter 32023

A registered charity (the parent) that operates hospitals and nursing homes and its subsidiary, which owns and manages nursing homes and retirement homes, form a joint venture to establish and operate an interim-care nursing home. Priority distributions received by the subsidiary in recognition of its services rendered in managing the facility, and reimbursements of its payroll expense in administering and managing the joint venture, are subject to GST to the extent of the interest of the parent in the joint venture.