Transfer Pricing 2023: Trends & Developments

The Rise in Court Intervention in Transfer Pricing Disputes

There are more transfer pricing disputes making their way to court in Canada. Here, transfer pricing disputes have been primarily resolved through one of two methods: a request for Competent Authority assistance under the Mutual Agreement Procedure (MAP) of a treaty or by way of a Notice of Objection filed with the Canada Revenue Agency (CRA) in respect of the Notice of Assessment or Reassessment.

In circumstances where taxpayers cannot have their matter adequately resolved at the Notice of Objection stage, taxpayers have increasingly pressed their cases to the tax court of Canada for resolution. The tax court functions as a trial court, with all that implies. A taxpayer can appeal a decision of the tax court to the Federal Court of Appeal. A further appeal to the Supreme Court of Canada is possible. However, the taxpayer must first file a leave application and the Supreme Court may grant leave or