royalty

29 October 2010 External T.I. 2009-0347791E5 F - Somme reçue par une société -- summary under Nature of Income

A corporation ("Holdco") holding some of the voting shares of a corporation ("Opco") may receive amounts (contingent payments) from a non-resident corporation or its subsidiary, in the event that certain events (liquidity events) occur in relation to the non-resident corporation or its subsidiary, with the payments to Holdco representing a percentage of the cash derived from the shares of the non-resident corporation's subsidiary (in the form of dividends o

16 August 2017 Internal T.I. 2017-0701291I7 - Exclusive Distributorship Rights -- summary under Article 12

In consideration for a lump sum, a non-resident in a Treaty country (NRco) granted an arm’s length Canadian company (Canco) the exclusive right to distribute its product in Canada, with Canco agreeing not to acquire or sell competitive products. The Directorate found that the lump sum was not a royalty on general principles and not subject to withholding under s. 212(1)(d) - but that the exclusivity of the distributorship right granted by NRco was a “restrictive covenant,” so that the lump sum would be subject to Part XIII tax under ss. 56.4(2) and 212(1)(i).

6 February 2015 Internal T.I. 2015-0566681I7 F - Redevances perçues d'avance -- summary under Paragraph 12(1)(a)

In order that the non-capital losses of Lossco would not expire, an affiliated licensee of a licence to manufacture and sell a product made a purported prepayment of the royalties (which were calculated as a function of sales), but with the prepaid royalty being non-refundable. CRA found that this payment likely was not a royalty (given its non-contingent nature) and that the full amount was business income to Lossco either under s.

By services, 28 November, 2015

Grand Toys Ltd. v. MNR, 90 DTC 1059, [1990] 1 CTC 2165 (TCC) -- summary under Paragraph 212(1)(d)

The taxpayer agreed to act as the exclusive distributor in Canada of articulated figurines produced by a Hong Kong joint venture ("Panosh") and agreed to pay, for each order it placed, 103% of the ex Hong Kong factory price, plus "a buying commission and royalty ... of U.S. $0.52". Because the "royalty" was in no way related to the taxpayer's profits or gross sales of the units, and because there was no element of contingency in the quantum of the payments to be made, it did not constitute a payment in the nature of rents, royalties or similar payments.

By services, 28 November, 2015

Canadian Industrial Gas & Oil Ltd. v. Government of Saskatchewan et al., 80 DLR (3d) 449, [1978] 2 SCR 545 -- summary under Subsection 92(2)

In order to divert to itself the increase in the price of oil that occurred after 1973, the Legislature of Saskatchewan enacted a "mineral income tax" approximately equal to 100% of the difference between the price received at the well-head and the price formerly received by the producers. Virtually all the oil produced in Saskatchewan was exported to other parts of Canada or the United States.

royalty