Asset Management Service

Table of Contents

See Also

Canadian Imperial Bank of Commerce v. The Queen, 2018 TCC 109

services provided by Visa to bank were not an asset management service

The CIBC issued Visa credit cards and utilized a credit card payment system operated and managed by Visa Canada. Visa Canada essentially acted as a largely automated go-between between the “issuer,” who provided the funds for a purchase at a merchant by a cardholder, and the “acquirer,” who used such funds to pay the merchant. Visa Canada added $18M in GST or HST to its charges for its services to CIBC in the years in question, and CRA denied CIBC’s s. 261 rebate claim therefor. Before finding that the supply by Visa Canada was a prescribed supply under para. (t) of “financial service,” Rossiter CJ found that Visa Canada was supplying a service described in para. (i), and that s. (q.1) did not apply, stating (at paras. 105-106):

[A]sset management services are a fairly active process where the underlying portfolio of financial assets/liabilities, through the efforts of the asset manager, are created, optimized or otherwise changed in some way.

In contrast, the liabilities incurred by CIBC are not created by Visa as Visa is not responsible for the issuing of the credit card. These liabilities are also not altered in anyway by the services provided by Visa, with Visa merely facilitating the transfer of funds between CIBC and the intended recipients of the funds for which the liabilities were incurred for. Section (q.1) does not appear to be applicable.

Words and Phrases
asset management
Locations of other summaries Wordcount
Tax Topics - Excise Tax Act - Section 123 - Subsection 123(1) - Supply single supply of payment platform 156
Tax Topics - Excise Tax Act - Section 123 - Subsection 123(1) - Financial Service - Paragraph (l) Visa arranged for payments between cardholder bank, merchant’s bank and merchant 260
Tax Topics - Excise Tax Act - Section 123 - Subsection 123(1) - Financial Service - Paragraph (i) Visa provided services to CIBC that related to an agreement for which credit card vouchers were issued 208
Tax Topics - Excise Tax Act - Section 123 - Subsection 123(1) - Financial Service - Paragraph (r.3) no (r.3) service as Visa did not assist in credit authorization 185
Tax Topics - Excise Tax Act - Section 123 - Subsection 123(1) - Financial Service - Paragraph (r.4) services provided by Visa that were listed in (r.4) were not the predominant elements 191
Tax Topics - Excise Tax Act - Section 123 - Subsection 123(1) - Financial Service - Paragraph (r.5) limited use of Visa logo did not engage (r.5) 138
Tax Topics - Excise Tax Act - Regulations - Financial Services (GST/HST) Regulations - Subsection 4(2) - Paragraph 4(2)(b) Visa service to CIBC was an administrative service 174
Tax Topics - Excise Tax Act - Regulations - Financial Services (GST/HST) Regulations - Subsection 4(3) - Paragraph 4(3)(c) activities of Visa were too passive to be of a "broker" 229
Tax Topics - Excise Tax Act - Regulations - Financial Services (GST/HST) Regulations - Subsection 4(1) - Person at Risk not a "person at risk" if risk is very remote 401