Words and Phrases - "services"

A corporation resident in the United States ("Marco") obtained a licence of stadium facilities from the taxpayers and contracted with them for the provision of related services (e.g., ticket sales and the sale of food, beverages and souvenirs) in connection with the production of a figure skating show in Canada by Marco. Lamarre T.C.J. referred to the finding in Taylor v. MNR, [1988] 2 CTC 2227, at 2234 (TCC) that "the term 'services' refers not to the final product or end result of a transaction, but rather to the process by which this is achieved" and found (at p. 350) that the producer (Marco), being the one who administers and supervises the making of the show that will be presented to the public, therefore is part of the process by which the show can be brought about. On this basis, and given the scope of the phrase "in respect of", the remittance to Marco by the taxpayers of the net proceeds of the show was subject to withholding under Regulation 105.

Lamarre T.C.J. also agreed with the position of the Minister that the obligation to withhold under Regulation 105 existed even if the non-resident was exempt under the Canada-U.S. Income Tax Convention (a claim which, in this case, was unsupported by the evidence).