A wholly-owned foreign affiliate (“FA”) of a corporation resident in Canada (“Canco”) provides marketing services for FMV fees to Canco respecting the sale of Canadian residential condominiums by Canco in the course of its Canadian business. Does real estate inventory, such as the Canco condos, held for sale in the regular course of business qualify as “goods” for purposes of s. 95(3)(b) so that, in this case, s. 95(3)(b) would oust the application of s. 95(2)(b) to the services income of FA?
CRA referred to the statement in Canadian Wirevision that “goods … is used in the common parlance of merchandise or wares, or, to put it in legal jargon, tangible moveable property” and to various dictionary definitions generally referencing “all tangible, moveable, personal property intended for sale,” Furthermore, CRA’s view that residential condominiums, being real estate, are not “goods” under s. 95(3)(b) was consistent with the balance of the wording of s. 95(3) – for instance s. 95(3)(a) excluded the transportation of goods.
Accordingly, if no other exclusions are met, s. 95(2)(b) would apply to services provided in connection with the sale of real estate inventory, including residential condominiums.