Non compete and non use payments treated as business income; transfers of rights may instead be capital gains, limited exceptions apply. Insertion of clause (va) into section 28 treats payments under agreements to refrain from carrying on activity or to refrain from sharing know how, patents, copyrights, trade marks, licences, franchises or similar business rights or information as taxable business receipts; exceptions exclude consideration chargeable as capital gains for transfer of rights to manufacture or carry on business and compensation from the Montreal Protocol multilateral fund. 'Agreement' is defined broadly to include informal or non enforceable arrangements and 'service' is given an expansive commercial meaning.
Cases where this provision is explicitly mentioned in the judgment/order text; may not be exhaustive. To view the complete list of cases mentioning this section, Click here.
Provisions expressly mentioned in the judgment/order text.
Non compete and non use payments treated as business income; transfers of rights may instead be capital gains, limited exceptions apply.
Insertion of clause (va) into section 28 treats payments under agreements to refrain from carrying on activity or to refrain from sharing know how, patents, copyrights, trade marks, licences, franchises or similar business rights or information as taxable business receipts; exceptions exclude consideration chargeable as capital gains for transfer of rights to manufacture or carry on business and compensation from the Montreal Protocol multilateral fund. "Agreement" is defined broadly to include informal or non enforceable arrangements and "service" is given an expansive commercial meaning.
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