See Also
Royal Bank of Canada v. The King, 2024 TCC 125
Smith J rejected the Crown position that such interchange financial services supplied by RBC to the non-resident merchant acquirer (found at para. 87 to be the recipient) were not zero-rated under Sched. VI, Pt. IX, s. 1 by virtue of the exclusion in para. 1(a) thereof for a “service [that] relates to (a) a debt that arises from … (ii) the lending of money that is primarily for use in Canada”. He noted that, in contrast to para. (g) of the financial service definition, which referred to “the making of any advance, the granting of any credit or the lending of money”, the carve-out in subpara. 1(a)(ii) referred only to the “lending of money”. Before going on to find that RBC was not lending money to the foreign bank but, rather, advancing credit, so that the exclusion in s. 1(a) did not apply, he stated (at para. 76):
[T]he phrase “relate to” should be narrowly construed as a broad interpretation of the carve-outs would defeat the policy objectives. See Ike Enterprises Inc. v. The Queen, 2017 TCC 59 (paras. 48-49). This is consistent with the conclusion reached in National Bank Life Insurance Company v. The Queen, 2005 TCC 425, where Lamarre J. (as she then was) found that when Parliament makes a rule and lists certain exceptions, the latter must be regarded as exhaustive and so strictly construed. She recognized the principle that exceptions should not be extended and if there was any doubt, the general rule should be favoured over the exception (paras. 38-40).
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 165 - Subsection 165(1.11) | issue should be stated "reasonably" | 131 |
| Tax Topics - Excise Tax Act - Section 141.02 - Subsection 141.02(21) | pre-approval of method for allocating inputs between foreign and domestic supplies did not stop CRA from assessing to deny zero-rating of the foreign supplies | 202 |
| Tax Topics - Excise Tax Act - Section 141.02 - Subsection 141.02(31) - Paragraph 141.02(31)(f) | s. 141.02(31)(f) is merely confirmatory of normal taxpayer onus | 98 |
| Tax Topics - Excise Tax Act - Schedules - Schedule VI - Part IX - Section 1 - Paragraph 1(a) | foreign interchange fees generated by Canadian credit card issuer related to the granting of credit rather than the making of a loan by it, and were not excluded under s. 1(a)(ii) | 445 |
| Tax Topics - Excise Tax Act - Section 141.02 - Subsection 141.02(1) - Direct Input | expenses of redeeming credit card loyalty points were inextricably linked to the issuer’s extension of credit, and only remotely linked to its earning zero-rated interchange fees | 368 |
| Tax Topics - Excise Tax Act - Section 169 - Subsection 169(1) | expenses of redeeming credit card loyalty points were an integral component of the issuer’s extension of credit, and not sufficiently connected to earning interchange fees | 181 |
| Tax Topics - Excise Tax Act - Section 123 - Subsection 123(1) - Recipient | merchant acquirer was the recipient of credit card interchange services even though it was a conduit to the merchant | 91 |
| Tax Topics - Excise Tax Act - Section 301 - Subsection 301(1.2) - Paragraph 301(1.2)(a) | taxpayer not precluded from raising an argument that the Minister was bound by an ITC method that it had described in detail in its pleadings | 175 |