Resolving Transfer Pricing Disputes In Canada

Introduction

The growth in international business has led to more Canadian companies transacting across borders with related parties, making transfer pricing an important focus of the Canada Revenue Agency ("CRA"). The CRA has invested significant resources in the area of transfer pricing which has established Canada as arguably the most sophisticated nation, and perhaps most aggressive, in international tax and transfer pricing. Furthermore, the Canadian tax system does not provide adequate measures to allow taxpayers to self-rectify filed taxation years where the transfer pricing analysis is subsequently determined to be inadequate. This increases the possibility of CRA audit action.