Canada: Transfer Pricing: What’s New In Canada (Part II)

Transfer pricing disputes in Canada have, predominately, been resolved through either a request for competent authority assistance under the Mutual Agreement Procedure ("MAP") of a treaty, or, to a much lesser extent, through the notice of objection process with CRA Appeals.  Regardless of the recent increase in transfer pricing cases being brought before the Courts, the MAP will likely continue to be the dispute resolution process most often utilized by a Canadian corporation in transfer pricing cases because, in the absence of a 100% reversal of a transfer pricing adjustment by either CRA Appeals or a Canadian court, economic double taxation may still exist as a consequence of the CRA upward transfer pricing adjustment. The correlative relief provided by the treaty partner under a MAP settlement resolves that double taxation. ... - Continue reading