Words and Phrases - "principal activity"
PWC, "Tax Insights: Investment limited partnerships ─ GST/HST & QST filing obligations", Issue 2020-27, May 04, 2020
Meaning of “principal activity”
A person’s “principal activity,” as discussed … in College of Applied Arts … depends on how important a particular activity assists the person in achieving its overall business objectives and goals when compared to its other business activities. To determine a person’s principal activity, the Canada Revenue Agency (CRA) generally considers:
- the relative profits realized by each segment of a person's business
- the total number of supplies made and the total value of the revenue received from supplies made in each business activity
- the relative value of the assets employed in each business activity
- the commercial practices of the person, including the time, attention, and efforts expended by the employees, managers, or corporate officers in each business activity, and
- the terms of any partnership agreement if the person is a partnership, or corporate objects in the case of a corporation
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Excise Tax Act - Section 225.4 - Subsection 225.4(6) | 214 |
The Colleges of Applied Arts and Technology Pension Plan v. The Queen, 2003 GTC 899-62, 2003 TCC 618
After noting that "the measure of the 'principal activity' must be the importance of the activity to the achievement of the organization's goals or purposes", Bowie T.C.J. found that the "principal activity" of a pension plan was not the investing of funds (as contemplated by paragraph (q)). Given that its principal object was to provide pensions to retired employees, its principal (or most important) activities must be considered to be those that contributed most to achieving those objects and it could not accomplish its objects without the collection of the employer and employee contributions, and the computation of payment of payment benefits to retirees; whereas it could, at least in theory, have collected contributions and paid them out to retirees without ever investing its funds.