Words and Phrases - "know-how"
Hasbro Canada Inc. v. The Queen, 98 DTC 2129 (TCC)
The taxpayer, which was a Canadian manufacturer and distributer of toys in Canada, paid fixed commissions expressed as a percentage of the purchase price of products acquired by it from the Far East, to an affiliated company resident in Hong Kong. Before going on to consider ss.212(1)(d)(ii) and (iii), Dussault TCJ. noted (at p. 2136) that "a royalty or similar payment is ... one made for the use of property, rights or information whereby the payments for such use are contingent upon the extent or duration of use, profits or sales by the user", and went on to find that because the purchase commissions were essentially for services rendered, they did not so qualify.