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ARTICLE · 28 SEPTEMBER 2022

CRA Transfer Pricing Memoranda On Downward Transfer Pricing Adjustments

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On June 21, 2022, the Canada Revenue Agency (CRA) replaced its Transfer pricing memorandum (TPM) on downward transfer pricing adjustments, TPM-03 dated October 20, 2003, with the revised TPM-03R.

CanadaTax
Steve Suarez
Steve Suarez
Natalie Goulard
Natalie Goulard
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Background

On June 21, 2022, the Canada Revenue Agency (CRA) replaced its Transfer pricing memorandum (TPM) on downward transfer pricing adjustments, TPM-03 dated October 20, 2003, with the revised TPM-03R.

TPMs are issued periodically by the CRA to communicate the government's transfer pricing policy and provide guidance on specific aspects of transfer pricing legislation.

TPM-03R provides updated guidance on how downward pricing adjustments should be directed within the CRA, and how they will be managed. The revised memoranda also emphasizes that downward transfer pricing adjustments "are not intended to serve as a vehicle for taxpayers to implement retroactive tax planning or base erosion and profit shifting strategies, nor are their intended to achieve double non-taxation".

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