The CRA Continues To Aggressively Audit International Transactions

Legislators and judiciaries alike have lent a hand in 2012 to modify aspects of the transfer pricing landscape, which is in constant evolution, leading to various interpretations by multinationals and the governing tax authorities. Confusion around transfer pricing is understandable considering that related parties must assume they are independent of one another when determining intercompany prices, thus creating a fictitious event. Recent legal developments in Canada will require the Canada Revenue Agency to consider all relevant intercompany transactions, not only a singular transaction that may be taken out of context. As well arbitration provisions, added to the Canada-US Income Tax Treaty, will help to ensure that double tax cases are not only resolved but resolved in a more timely manner.