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ARTICLE · 31 JULY 2026

Transfer Pricing Contemporaneous Documentation Simplification Measures

Blake, Cassels & Graydon LLP
Blake, Cassels & Graydon LLP
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Blake, Cassels & Graydon LLP

Blake, Cassels & Graydon LLP

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Canada's Department of Finance has released draft regulations for a new simplified transfer pricing documentation regime under subsection 247(4.1), designed to reduce compliance burdens for eligible taxpayers and partnerships. The regime introduces streamlined requirements for small taxpayers with gross revenue up to C$25-million and certain small transactions, though questions remain about how the simplified analysis differs from existing documentation standards. An anti-avoidance rule ensures the regime c

CanadaTax
Erich Schultze
Erich Schultze
Jeffrey Shafer
Jeffrey Shafer
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Subsection 247(4.1) of Canada’s rewritten transfer pricing rules introduces an elective simplified contemporaneous documentation regime that may reduce the compliance burden for eligible taxpayers and partnerships. Where the relevant entity qualifies and makes an election, the simplified regime applies in lieu of the more specific requirements of subsection 247(4). The simplified regime is proposed to apply to taxation years beginning on or after January 1, 2026.

On July 23, 2026, the Department of Finance released draft regulations outlining the eligibility criteria for and scope of the simplified regime. Here are five takeaways for businesses:

  1. The simplified regime still requires taxpayers to complete asupporting transfer pricing analysis. Taxpayers must, in each case, document the analysis that was performed to justify that the amounts in question are based on arm’s length conditions. Taxpayers must also make or obtain records or documents describing each of the (i) terms and

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