Timetable for Canadian Transfer Pricing Actions

PLEASE NOTE: THIS INFORMATION WAS ORIGINALLY SUBMITTED BY COOPERS & LYBRAND, CANADA

In February, the Canadian government announced that taxpayers must prepare "contemporaneous documentation" to support their cross-border transactions with related non-residents or face penalties if incorrect pricing results in subsequent adjustments to income. These new rules are to apply for taxation years beginning after 1997. (See additional commentary in our earlier articles "Canadian Budget Includes Transfer Pricing Changes" (20 February 1997) and "New Transfer Pricing Penalties from Canada" (27 March 1997).)

Revenue Canada promised a news release before the end of June 1997, an opportunity for taxpayers to comment, and final legislation by the end of the year.