- Tax Court of Canada denied input tax credits (ITCs) claimed by 267 O’Connor Limited (Appellant) in connection with a settlement payment made to Starwood.
- The court determined that most of the settlement payment was to cover Starwood’s expenses, not as consideration for a supply.
- The court also stated that the mandatory documentary requirements for ITC claims were not met.
- The dispute arose from a failed property sale agreement where Starwood sued the Appellant for performance and damages.
- The settlement involved the Appellant paying $800,000 to Starwood, including a deposit reimbursement and legal fees.
- The Appellant claimed ITCs on the $450,000 portion of the settlement payment, arguing it was for taxable supplies provided by Starwood.
Source: jdsupra.com
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
