A non-monetary consideration includes providing services, transferring tangible and intangible property or any similar dealings. The dealing may be a barter, swap, bonus or discount, or any type of similar agreement.
Monetary consideration will generally include:
- cash payments
- payment by cheque
- telegraphic and bank-to-bank transfer of funds
- inter-company loan account charges.
Non-monetary consideration therefore includes any consideration other than those involving the exchange of money or funds.
In particular, debt-for-equity swaps and non-monetary settlements of inter-company loan accounts are taken to be non-monetary consideration.
Example item 3a
Consideration is regarded as nil where there is no charge or adjustment allocating income or expenditure between the parties for provision of services, transfer of property, or other transactions listed on Schedule 25A by either:
- the head office to the permanent establishment
- the permanent establishment to the head office or another related international party.
Example item 3b