In a unanimous decision, released on October 18, 2012, the
Supreme Court of Canada upheld the judgment of the Federal Court of
Appeal in Canada v. GlaxoSmithKline Inc. As the first
transfer pricing case decided by the Supreme Court, this case
provides needed guidance, in particular, with respect to the
meaning of, and the proper approach to the determination of, an
arm's length price, and the role of the Organisation for
Economic Co-operation and Development (OECD) Transfer Pricing
Guidelines (the Guidelines) in Canada. The taxpayer was
represented on appeal by Osler's
Al Meghji,
Joseph Steiner,
Amanda Heale and
Pooja Samtani.
Transfer pricing issues arise in the context of non-arm's
length transactions involving entities resident in different
jurisdictions, where ordinary market forces may not regulate terms
and conditions of the transactions. From a policy perspective, the
concern is that prices may be set so as to divert profits from
higher tax
