Canadian transfer pricing rules – scattered from far and wide

Volume No. 16-02

The recent March 22 budget announced an update of the transfer pricing guidance used by the CRA.  The main change was the adoption of the revised OECD Transfer Pricing Guidelines, last amended in October 2015 as a result of the OECD/G20 BEPS Project.  While this guidance does not have the force of law, it is used by the CRA in transfer pricing audits as well as selectively by Canadian courts.

This announcement itself is noteworthy only in its timing, given CRA has deviated somewhat from the international consensus on the implementation of the BEPS Project results.  More notable is that Canadian transfer pricing guidance is now scattered across 22 documents – add a few more for large companies required to file a Country-by-Country report.  This count does not include the law or transfer pricing decisions from the courts, which are critical to consider.

The result will be awkward and time-consuming reading until the OECD Guidelines are properly reissued in the next few years after the conclusion of further work.

In the long-run, taxpayers and their advisors should ideally be able to reference two or three documents, in addition to relevant jurisprudence.  We’ll update you once we get there.


TRANSFER PRICING NEWSLETTER is provided as a free service to clients and friends of Cadesky Tax. Tax laws are complex and are subject to frequent change. Professional advice should always be sought before implementing a tax planning arrangement or taking an uncertain tax filing position. Cadesky Tax cannot accept any liability for the tax consequences that may result from acting based on the contents hereof.