Cases
Royal Bank of Canada v Commissioners for His Majesty's Revenue and Customs, [2023] EWCA Civ 695
Falk LJ found support for her view that Art. 6 of the Canada-U.K. Treaty did not extend to a purely contractual right to receive payments based on...
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| Tax Topics - Treaties - Income Tax Conventions - Article 6 | an oil and gas royalty is not income from immovable property under the Canada-U.K. Treaty where the recipient never had any interest in the oil field | 529 |
| Tax Topics - Treaties - Income Tax Conventions | French version relevant to interpretation | 28 |
MCA Television Ltd. v. The Queen, 94 DTC 6375 (FCTD)
MacKay J. found that the reference in Article XIIIC of the 1942 Canada-U.S. Convention to "motion picture films" referred only to products which...
The Queen v. St. John Shipbuilding & Dry Dock Co. Ltd., 80 DTC 6272, [1980] CTC 352 (FCA)
Thurlow, C.J. stated (p. 6275) that "'royalties' ... connotes a payment calculated by reference to the use or to the production or revenue or...
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| Tax Topics - Income Tax Act - Section 212 - Subsection 212(1) - Paragraph 212(1)(d) - Subparagraph 212(1)(d)(i) | 36 |
Vauban Productions v. The Queen, 75 DTC 5371, [1975] CTC 511 (FCTD), aff'd 79 DTC 5186, [1979] CTC 262 (FCA)
Addy, J. stated (respecting Article 13 of the 1951 Canada-France Tax Convention): "The term 'royalties' normally refers to a share in the profits...
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| Tax Topics - Income Tax Act - Section 20 - Subsection 20(1) - Paragraph 20(1)(z) | 55 | |
| Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Disposition | not all rights transferred | 48 |
| Tax Topics - Other Legislation/Constitution - Federal - Official Languages Act - Section 13 | 29 | |
| Tax Topics - Treaties - Income Tax Conventions | 23 | |
| Tax Topics - Income Tax Act - Section 212 - Subsection 212(1) - Paragraph 212(1)(d) | royalties normally based on user | 220 |
MNR v. Paris Canada Films Ltd., 62 DTC 1338, [1962] CTC 538 (Ex Ct)
A lump-sum payment made by a Canadian film distributor to a New York company for the acquisition of exclusive rights to exploit films was...
Western Electric Co. Inc. v. MNR, 69 DTC 5204, [1969] CTC 274 (Ex Ct), briefly aff'd 71 DTC 5068 (SCC)
A U.S.-resident subsidiary of American Telephone and Telegraph Co. ("Western Electric") provided a mass of confidential technical information to a...
See Also
PepsiCo, Inc v Commissioner of Taxation, [2024] FCAFC 86
A U.S. company (PepsiCo) entered into an “exclusive bottling appointment” (“EBA”) with an independent Australian bottling company (the...
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| Tax Topics - Income Tax Act - Section 212 - Subsection 212(1) - Paragraph 212(1)(d) | sales proceeds for concentrate paid to a Pepsi Australian subsidiary could not be characterized as trademark royalties paid to Pepsi | 226 |
| Tax Topics - General Concepts - Payment & Receipt | there can be no payment by direction unless there is an antecedent obligation by the creditor to the third party | 160 |
Revenue & Customs v Burlington Loan Management DAC, [2024] UKUT 152
BLM was a substantial Irish-resident investment company, which started acquiring proved claims in the administration of Lehman Brothers...
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| Tax Topics - Treaties - Multilateral Instrument - Article 7 - Article 7(1) | accessing Irish-UK treaty dividend-withholding reduction was not abusive given that not a treaty-shopping or conduit transaction | 514 |
PepsiCo, Inc v Commissioner of Taxation, [2023] FCA 1490, rev'd [2024] FCAFC 86
A U.S. company (“PepsiCo”) entered into an “exclusive bottling appointment” (“EBA”) with an independent Australian bottling company...
Engineering Analysis Centre of Excellence Private Limited v. The Commissioner of Income Tax & Anr., Civil Appeal Nos. 8733-8734 of 2018, 2 March 202, Supreme Court of India
At issue were numerous joined appeals involving the application of withholding tax by the Commissioner of consideration paid by residents of India...
Director of Income Tax v. A.P. Moller Maersk, Civil Appeal No. 2960 of 2017 (Supreme Court Of India, Civil Appellate Jurisdiction)
The Danish-resident taxpayer had set up and maintained a global telecommunication facility connected to computers in Denmark to assist all of its...
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| Tax Topics - Treaties - Income Tax Conventions - Article 8 | computer tracking-system charges of a Danish company to agents in India were profits of its international shipping business | 194 |
DCIT v. Bombardier Transportation India Pvt. Ltd, ITA No.555/Ahd/2016 (ITAT Ahmedabad)
The taxpayer was a wholly-owned Indian subsidiary within the Bombardier group, that was engaged in the business of manufacturing and supply of...
Tech Mahindra Limited v Commissioner of Taxation, [2016] FCAFC 130
The Indian-resident taxpayer performed services for its Australian customers from its offices in India and through an Australian permanent...
Technip Singapore Pte Ltd. v. Director of Income Tax (2016), W.P.(C)-7416/2012 (Delhi High Court)
The taxpayer was a Singapore company which installed a marine crude oil receiving facility over a 41-day period for Indian Oil Corporation Ltd...
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| Tax Topics - Treaties - Income Tax Conventions - Article 5 | major installation project lasting 41 days was not a PE | 110 |
Velcro Canada Inc. v. The Queen, 2012 DTC 1100 [at at 2966], 2012 TCC 57
The taxpayer had previously paid royalties under a licence agreement with an affiliated Netherlands corporation ("VIBV"). When VIBV became a...
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| Tax Topics - General Concepts - Agency | alleged agent had discretion and no power to bind | 137 |
Canada v. Dawn’s Place Ltd., [2006] GSTC 137, 2006 FCA 349
International subscribers to the registrant's internet website were granted a "non-exclusive, limited and revocable licence to download and view...
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| Tax Topics - Excise Tax Act - Schedules - Schedule VI - Part V - Section 10 | use of copyright in downloading images was only incidental | 119 |
Angoss International Ltd. v. R., 99 DTC 567, [1999] 2 CTC 2259 (TCC)
A lump-sum payment made for a non-exclusive licence to source code to be used by the taxpayer in manufacturing software to be sold by it was...
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| Tax Topics - Income Tax Act - Section 212 - Subsection 212(1) - Paragraph 212(1)(d) - Subparagraph 212(1)(d)(vi) | licensing of source code used in manufacturing | 47 |
| Tax Topics - Income Tax Act - Section 212 - Subsection 212(1) - Paragraph 212(1)(d) | lump sum payment for a non-exclusive licence was similar to royalty | 47 |
Administrative Policy
27 March 2018 External T.I. 2017-0715561E5 - Withholding tax on royalties for streamed content
Canco streams movies and TV shows (the “digital content”) to its Canadian and foreign subscribers (who pay monthly fees) through a TV video...
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| Tax Topics - Income Tax Act - Section 212 - Subsection 212(5) | NR fee for streamed films and TV shows taxable under s. 212(5) only re Canadian use or reproduction | 329 |
| Tax Topics - Statutory Interpretation - Interpretation Act - Section 35 - Subsection 35(1) - Broadcasting | Interpretation Act definition of broadcasting not applicable to Treaty interpretation of those words | 246 |
1 June 2018 External T.I. 2017-0723051E5 - Meaning of "Relieved from Tax"
A former Canadian author, who now was resident but not domiciled in the UK, was not subject to UK tax on royalties he received from a Canadian...
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| Tax Topics - Treaties - Income Tax Conventions - Article 29 | Canadian royalties received exempt of U.K. tax by non-dom U.K. resident not eligible for Treaty-reduced rate | 277 |
16 August 2017 Internal T.I. 2017-0701291I7 - Exclusive Distributorship Rights
In consideration for a lump sum, a non-resident in a Treaty country (NRco) granted an arm’s length Canadian company (Canco) the exclusive right...
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| Tax Topics - Income Tax Act - Section 212 - Subsection 212(1) - Paragraph 212(1)(d) - Subparagraph 212(1)(d)(i) | Farmparts likely excluded application to product distributorship right/product name on product not a valuable use of trademark | 507 |
| Tax Topics - Income Tax Act - Section 212 - Subsection 212(1) - Paragraph 212(1)(d) | lump sum non-contingent payment for distributorship right was not a royalty | 120 |
| Tax Topics - Income Tax Act - Section 56.4 - Subsection 56.4(1) - Restrictive Covenant | a lump sum paid to a non-resident for granting an exclusive right to distribute its product in Canada was for a restrictive covenant | 279 |
| Tax Topics - Income Tax Act - Section 212 - Subsection 212(1) - Paragraph 212(1)(i) | a lump sum paid to a non-resident for granting an exclusive right to distribute its product in Canada was subject to s. 212(1)(i) withholding | 216 |
15 June 2015 External T.I. 2014-0525501E5 - Royalty payments & the US or UK Treaties
Canadian-resident UserCos, who use existing confidential lists of the names and addresses of customers who have purchased certain types of...
21 April 2015 External T.I. 2013-0494251E5 - 128.1(4) and Part XIII tax on future payments
At the time of his emigration from Canada to the US, "Mr. X" was entitled to the "Payments" from a Canadian resident who had purchased a client...
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| Tax Topics - Income Tax Act - Section 128.1 - Subsection 128.1(4) - Paragraph 128.1(4)(b) | right to client list utilization payments | 115 |
| Tax Topics - Income Tax Act - Section 212 - Subsection 212(1) - Paragraph 212(1)(d) - Subparagraph 212(1)(d)(v) | client list utilization payments to U.S. resident | 137 |
23 January 2015 External T.I. 2013-0509771E5 - Oil & gas payments made to U.S. resident
Mr. A, a U.S. resident, grants the right to drill for or take the oil & gas from his Canadian freehold property to a Canadian company, in...
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| Tax Topics - Income Tax Act - Section 115 - Subsection 115(1) - Paragraph 115(1)(a) - Subparagraph 115(1)(a)(iii.1) | negative CCDE pool for non-resident individual | 176 |
| Tax Topics - Income Tax Act - Section 66.4 - Subsection 66.4(5) - F | FMV addition and subtraction where drilling rights are granted for royalty | 143 |
| Tax Topics - Income Tax Regulations - Regulation 805 | application to resource royalties | 252 |
| Tax Topics - Treaties - Income Tax Conventions - Article 6 | negative CCDE gain from grant of oil and gas royalty not exempt under US Treaty | 180 |
18 November 2013 Internal T.I. 2011-0399581I7 F - Application of section 212(1)(d) ITA
Canco is granted an exclusive licence, bearing a royalty, by NRCO (an arm's length resident of Ireland) in respect of patents and know-how for the...
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| Tax Topics - Income Tax Act - Section 212 - Subsection 212(1) - Paragraph 212(1)(d) - Subparagraph 212(1)(d)(i) | seriatim benchmark lump sums, although not royalties, came within s. 212(1)(d) | 154 |
| Tax Topics - Income Tax Act - Section 212 - Subsection 212(1) - Paragraph 212(1)(d) - Subparagraph 212(1)(d)(viii) | cost-sharing agreement with catch-up payment provisions qualified | 87 |
21 September 2012 External T.I. 2012-0457951E5 - Fee for Information
CRA was asked whether the payment by a Canadian insurance broker (Aco) to a US insurance broker (Bco) of a percentage of the commissions earned by...
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| Tax Topics - Income Tax Act - Section 212 - Subsection 212(1) - Paragraph 212(1)(d) - Subparagraph 212(1)(d)(ii) | 130 |
27 August 2012 External T.I. 2011-0416181E5 - US internet publisher - CDN resident advertiser
A US website publisher, which qualifies for benefits under the Canada-US Income Tax Convention and does not have a server or other permanent...
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| Tax Topics - Income Tax Act - Section 212 - Subsection 212(1) | 153 | |
| Tax Topics - Income Tax Act - Section 212 - Subsection 212(1) - Paragraph 212(1)(d) - Subparagraph 212(1)(d)(i) | clicks fees to website | 156 |
| Tax Topics - Income Tax Act - Section 212 - Subsection 212(1) - Paragraph 212(1)(d) - Subparagraph 212(1)(d)(iii) | 345 |
2 August 2012 External T.I. 2011-0422781E5 - Part XIII tax-fee to use on-line trading program
The taxpayer inquired about whether Part XIII tax is payable in respect of a "licence fee" paid to a non-resident for access to "an on-line...
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| Tax Topics - Income Tax Act - Section 212 - Subsection 212(1) - Paragraph 212(1)(d) - Subparagraph 212(1)(d)(i) | 105 |
2012 Ruling 2011-0416821R3 - Article XII of Canada-US Tax Convention
A "qualifying person" resident of the US ("Pubco") provides Canco with an exclusive licence to distribute two products in Canada, one of which...
2011 Ruling 2011-0416891R3 - Fees for Digital Content & Management Services
A US LLC ("Corporation C"), whose sole member was a US corporation qualifying for benefits under the Canada-US Convention, ran a platform for the...
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| Tax Topics - Income Tax Act - Section 212 - Subsection 212(4) - Paragraph 212(4)(a) | management of on-line store | 232 |
1 February 2012 External T.I. 2011-0431571E5 - Canadian resource royalty received by US resident
Oil royalty payments are covered by Art. VI, para. 2 of the Canada-US Convention ("amounts computed by reference to the amount or value of...
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| Tax Topics - Treaties - Income Tax Conventions - Article 6 | 53 |
22 February 2011 External T.I. 2010-0374421E5 - Motion Picture Copyright Royalties
The exemption in the Canada-US Convention for royalties paid for the reproduction of motion picture films (in this case, on videos) for private...
19 April 2011 External T.I. 2011-0392761E5 - Motion picture films, ITA 212(5)
A Canadian-resident company (Canco) uses motion pictures distributed to it by a US and French company by reproducing them in Canada in digitized...
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| Tax Topics - Income Tax Act - Section 212 - Subsection 212(5) | film reproduction in encrypted form | 93 |
Transfer Pricing Memorandum TPM-06, “Bundled Transactions” 16 May 2005
After noting the exemption in Art. 12 of the Canada-U.S. Tratyu for payments for the use of or right to use know-how, but not for the provision of...
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| Tax Topics - Income Tax Act - Section 247 - New - Subsection 247(2) | 147 |
Income Tax Technical News, No. 25, 30 October 2002, "E-Commerce"
3 December 2002 External T.I. 2002-0173855 - Removal computer software OECD abservation
Respecting the position of Canada that after May 27, 2002 a payment for the use of custom computer software will only be subject to the royalty...
11 December 2002 Internal T.I. 2002-0173007 F - Observation aux commentaires (OCDE)
The TSO proposed to impose withholding tax (at a Treaty-reduced rate of 10%) on consideration paid prior to March 28, 2002 by a Canadian resident,...
Income Tax Technical News, No. 23, 18 June 2002
As Canada has removed its observation on Article 12 of the OECD Model Convention, CCRA generally will no longer view payments by a user of...
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| Tax Topics - Income Tax Act - Section 212 - Subsection 212(1) - Paragraph 212(1)(d) - Subparagraph 212(1)(d)(i) | 104 |
26 March 2001 External T.I. 2001-0070165 F - Conventions fiscales et lois provinciales
The questioner noted that, in the situation of a Quebec resident with property income from Canada and whose dual residence was determined in...
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| Tax Topics - Treaties - Income Tax Conventions - Article 2 | Canada has no obligation to absorb Quebec taxes imposed on property income with treaty-reduced withholding | 165 |
15 October 1997 External T.I. 9700185 - FRANCHISE AGREEMENT IN PARENT AND SUBSIDIARY CASE
After indicating that "franchise" had its broad meaning under the Canadian domestic income tax jurisprudence as described in IT-477, RC indicated...
19 February 1997 External T.I. 9616305 - ROYALTY PAYMENTS FOR SHOWING VIDEOS IN PUBLIC
In noting that royalties paid for a licence to make videos available to the patrons of a health club, who view videos on installed televisions...
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| Tax Topics - Income Tax Act - Section 212 - Subsection 212(5) | health club videos | 54 |
27 June 1996 External T.I. 9605225 - ARTICLE XII US CONVENTION - PAYMENTS FOR USE OF DATABASE
Payments made by a Canadian resident user to a U.S. resident supplier for accessing an information data base located in the U.S. via a modem...
1996 Ontario Tax Conference Round Table, Q. 3 (No. 9630040)
RC has not formulated a position on the essential characteristics of a franchise agreement for purposes of subparagraph 3(c) of Article XII of the...
1996 Ontario Tax Conference Round Table, Q. 1 (No. 9630030, see also 9621950a)
In general, payments to a U.S. or Netherlands resident for rights in respect of the use of custom computer software in Canada will be exempt on...
6 September 1995 External T.I. 9518895 - WITHHOLDING TAX
RC accepts that royalties paid for the use of, or the right to use, know-how as defined in paragraph 11 of the Commentary on Article 12 of the...
22 March 1995 External T.I. 9419185 - WITHHOLDING TAX ON ROYALTIES
Where the Italian branch of a Canadian corporation pays royalties to a German affiliate of the Canadian corporation as the result of the licensing...
6 March 1995 Internal T.I. 9428767 - VIDEO REPRODUCTION RIGHTS
The exemption in Article XII of the Canada-U.S. Convention for copyright royalties does not apply to royalties for video tape works intended for...
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| Tax Topics - Income Tax Act - Section 212 - Subsection 212(5) | 18 |
20 December 1994 External T.I. 9421435 - ROYALTIES AND CANADA-UK INCOME TAX CONVENTION
With respect to a situation where a Canadian company pays royalties to a resident of the U.K. for the right to reproduce certain movies,...
3 August 1994 External T.I. 9108855 - WITHHOLDING TAX COMPUTER SOFTWARE ROYALTIES
The payment to a non-resident for the right to distribute computer software is generally taxable under s. 212(1)(d). Such payments made to a...
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| Tax Topics - Income Tax Act - Section 212 - Subsection 212(1) - Paragraph 212(1)(d) - Subparagraph 212(1)(d)(vi) | 179 |
29 July 1994 External T.I. 9418695 - WITHHOLDING TAX COMPUTER SOFTWARE/SILDEN CASE
Payments made by a Canadian resident to a U.S. resident for the right to distribute computer software would generally be taxable under s....
93 C.R. - Q. 29
A payment to a non-resident for the use of, or the right to use, a custom computer software program for a period of indefinite duration is subject...
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| Tax Topics - Income Tax Act - Section 212 - Subsection 212(1) - Paragraph 212(1)(d) - Subparagraph 212(1)(d)(i) | 50 |
93 C.M.TC - Q. 11
If a resident of a non-treaty country owning computer software rights licences them to residents of Canada "via" a Dutch corporation to take...
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| Tax Topics - Income Tax Act - Section 245 - Subsection 245(1) - Tax Benefit | 49 |
5 January 1993 T.I. 922053 (November 1993 Access Letter, p. 509, ¶C180-153; Tax Window, No. 28, p. 8, ¶2404)
Where a Canadian firm agrees with an American firm to duplicate video cassettes for sale or distribution through rental establishments for...
14 October 1992 Rulings Tax Seminar Central Region 9230057
"We would definitely recommend that the Department challenge any arrangement where a Canadian distributor supposedly enters into an agreement...
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| Tax Topics - Income Tax Act - Section 212 - Subsection 212(1) - Paragraph 212(1)(d) - Subparagraph 212(1)(d)(vi) | 69 |
4 March 1992 Memorandum (Tax Window, No. 17, p. 11, ¶1781)
Payments made for the use of a trademark are not exempt under Article XIII(3) of the Canada-U.S. Convention because they are not in respect of...
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| Tax Topics - Income Tax Act - Section 212 - Subsection 212(1) - Paragraph 212(1)(d) - Subparagraph 212(1)(d)(vi) | 78 |
10 January 1990 T.I. (June 1990 Access Letter, ¶1281)
The definition of royalties in the Canada-U.S. Income Tax Convention includes payments made to a resident of the U.S. for the use of computer...