Subsection 231(1) - Bad Debt — Deduction From Net Tax
Cases
North Shore Power Group Inc. v. Canada, 2018 FCA 9
A supplier (Menova) received substantial down payments respecting its sale of solar array projects, and then became insolvent before earning more...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Excise Tax Act - Section 232 - Subsection 232(2) | no sum is credited to the purchaser if no sum is placed at its disposal | 420 |
See Also
Alcoa Canada Cie v. ARQ, 2024 QCCQ 4490
The taxpayer (Alcoa) entered into a supply agreement with a purchaser (Sural), which provided that Sural would maintain a standby letter of credit...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Excise Tax Act - Section 123 - Subsection 123(1) - Money | standby letter of credit was money | 79 |
Castro v. The King, 2024 TCC 3
As a condition to receiving a loan to fund the renovation of a property of the two registrants (the Castros), the Castros were required to...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 251 - Subsection 251(2) - Paragraph 251(2)(b) - Subparagraph 251(2)(b)(ii) | a lender-required property transfer to a subsidiary whose shares were pledged, was non-arm’s length | 200 |
Greenfield Mining Services Inc. v. Agence du revenu du Québec, 2020 QCCQ 2869
The appellant (“Greenfield”) entered into a services contract with a junior Quebec mining company (“CRI”) to assist it in developing a...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Excise Tax Act - Section 232 - Subsection 232(3) - Paragraph 232(3)(c) | implicit finding that ETA s. 231 trumps s. 232 | 218 |
North Shore Power Group Inc. v. The Queen, 2017 TCC 1, rev'd 2018 FCA 9
The appellant (North Shore) paid half (or approximately $3.0 million plus HST) of the purchase price for various solar array projects to the...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Excise Tax Act - Section 232 - Subsection 232(3) | HST imposed on a customer through the issuance to it of a credit note by an insolvent supplier | 298 |
| Tax Topics - Excise Tax Act - Section 168 - Subsection 168(9) | "deposit" for work being performed was not a deposit | 167 |
Vivaconcept International Inc. v. The Queen, 2013 TCC 336
The appellant, a registrant in the events management business, invoiced a customer (Flora) for a total of $1,769,694 including GST of $103,440 for...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Excise Tax Act - Section 232 - Subsection 232(3) | 23 month delay acceptable | 200 |
Ministic Air Ltd. v. The Queen, 2008 TCC 296
The appellant was not entitled to a credit under s. 231(1) in respect of the GST of approximately $170,000 owing to it as there was "little...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 251 - Subsection 251(2) - Paragraph 251(2)(b) - Subparagraph 251(2)(b)(i) | 128 |
McCool v. The Queen, 2005 TCC 357 (Informal Procedure)
In finding that the appellant, a criminal lawyer, had not satisfied the "writing off" requirements of s. 231(1) in respect of amounts owing to him...
Administrative Policy
25 March 2021 CBA Commodity Taxes Roundtable, Q.8
A supplier after debiting accounts receivable and crediting revenue for an amount it has invoiced, immediately reverses this entry because (a) it...
P-084R "Forgiven Debts Considered Bad Debts" 8 March 1999
[F]orgiven debts pursuant to an arrangement under the Companies' Creditors Arrangement Act are considered to be bad debts as opposed to reductions...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Excise Tax Act - Section 232 - Subsection 232(2) | 54 |
B-042 "Refund, Adjustment or Credit of GST"
GST/HST Policy Statement P-029R, "Bad Debts Deduction When Accounts Receivable are Bought or Taken Back," 4 January 1999
A registrant is entitled to claim a deduction pursuant to the provisions of subsection 231(1) of the Act in situations where the receivable has...
Articles
Sabrina Wong, Sania Ilahi, "Tax Implications of Asset Securitizations", 2015 CTF Annual Conference Report
Advantages of sale to securitization trust on recourse basis (p. 12:25)
P-029R [states]:
...It is the Department's position that where a person...
Steven D'Arcy, "Tax Paid in Error", Canadian GST Monitor, No. 136, 31 January 2000, p. 1.
Subsection 231(1.1)
See Also
9267-9075 Québec Inc. v. The Queen, 2020 TCC 53
The appellant (“9267”) sold domain names on September 2012 for $500,000, payable in instalments, plus GST and QST to another corporation...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Excise Tax Act - Section 232 - Subsection 232(3) | failure to credit the adjustment precluded a s. 232(3) deduction | 203 |
Administrative Policy
18 September 2017 Interpretation 176502
A registrant is reassessed for GST/HST that it did not charge on an invoice to a customer which declared bankruptcy prior to the reassessment and...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Excise Tax Act - Section 232 - Subsection 232(2) | credit can be generated by issuing credit note to bankrupt customer | 160 |
Subsection 231(3)
Administrative Policy
Policy Statement P-058R, Recovery Of Bad Debts, 26 October 1998 (obsolete from September 2011)
A registrant obtains credit insurance which covers losses sustained on accounts receivable which become bad debts. CCRA ruled:
The insurance...