The Transfer Pricing Law Review: Canada

Overview

Canada has a long history of transfer pricing rules in its income tax laws. The current iteration of transfer pricing rules can be found in Section 247 of the Income Tax Act (the Act). This rule applies to any Canadian resident taxpayer of any kind who transacts with a non-resident of Canada with whom it does not deal at arm's length for purposes of the Act.

The concept of arm's length in the Act is defined to include all related parties (generally those where one is directly or indirectly legally controlled by the other, or where they are under common legal control) as well as those who are, as a matter of fact, not dealing at arm's length. This concept of factual non-arm's-length relationship can be uncertain at times but has been interpreted by the courts to include:

  1. where there is a common mind directing the bargaining for both parties;
  2. where parties are acting in concert without separate interests; and
  3. where one party has exercised de facto control over the other.2

Subsection 247(2) of the Act contains two separate substantive rules:

  1. a 'regular' transfer pricing rule that permits the Minister of National Revenue (in practice, the Canada Revenue Agency or CRA) to adjust a taxpayer's tax results to those that would have resulted had the 'terms and conditions' of transactions between parties not dealing at arm's length been those terms and conditions that would have been made or agreed to parties dealing at arm's length, and
  2. a 'recharacterisation rule' permitting CRA to recharacterise a transaction and determine tax results based on such hypothetical transaction that would have been undertaken by arm's-length parties, implemented on arm's-length terms and conditions, which rule is available where a transaction or series of transactions would not have been undertaken by parties dealing at arm's length and such transaction or series can reasonably be considered not to have been entered into primarily for bona fide purposes other than to obtain a tax benefit.

The Act specifically excludes from the application of Section 247 loans to, or guarantee fees in respect of the guarantee of the debts of, a 'controlled foreign affiliate' of a taxpayer. Shareholder transactions, such as dividends, returns of capital, and contributions of capital (outside the context of a cost contribution arrangement), are generally not subject to the transfer pricing rules in Section 247.

Section 247 of the Act was first enacted in 1998 with the express intent of aligning Canada's transfer pricing rules more closely with the international 'arm's-length' standard as expressed in the OECD Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations (OECD Guidelines). Canada also has an extensive treaty network, with 94 double tax treaties currently in force. These treaties are mostly based on the OECD Model Tax Convention on Income and Capital, including the Article 9 transfer pricing provisions, which themselves tie into the arm's-length principle as set out in the OECD Guidelines.

When reference is made to the OECD Guidelines, courts have not been entirely consistent regarding which version should be consulted. By analogy to case law3 dealing with reliance on the Commentary on the OECD Model Tax Convention on Income and Capital in the interpretation of tax treaties, recourse to a variety of versions of the OECD Guidelines may be justified. However, it is arguable that new concepts introduced into the OECD Guidelines after a particular transaction was entered into should not be relied upon to evaluate the arm's-length pricing of such transaction.

Notwithstanding this connection to the OECD Guidelines, Section 247 does not reference those guidelines or in any other way incorporate them into Canadian law. The result is a uniquely Canadian rule, albeit one whose application continues to be strongly influenced by the OECD Guidelines. Many of the decided court cases on transfer pricing in Canada make reference to the OECD Guidelines, but the Supreme Court of Canada has made it clear that:

[T]he Guidelines are not controlling as if they were a Canadian statute and the test of any set of transactions or prices ultimately must be determined according to s. 69(2)4 rather than any particular methodology or commentary set out in the Guidelines.5

Rulings such as this, and others that have followed, continue to make it difficult for CRA to rely on some of the approaches or theories in the OECD Guidelines that rely on preferring alleged 'economic substance' over the substance of the legal relationships governing a taxpayer's transactions. Both CRA and the Department of Finance have stated that these decisions, including the restrictions placed on the applications of the recharacterisation rule, highlight 'shortcomings' in Canada's transfer pricing laws. The 2021 Canadian federal budget, released on 19 April 2021, announced that the government intends to release a consultation paper in the coming months setting out possible changes to improve Canada's transfer pricing rules. These proposals are not yet available; taxpayers and advisors alike are anxious to see what new directions may be proposed for Canada's transfer pricing rules.

Filing requirements

Canada technically does not have a requirement to prepare contemporaneous documentation. However, if a transfer pricing adjustment is made, Subsection 247(3) of the Act imposes penalties on a taxpayer that are generally equal to 10 per cent of the amount of any income adjustment or capital adjustment (e.g., to the cost of property) made, unless the taxpayer has made reasonable efforts to determine and apply arm's-length prices to its transactions. For this purpose, Subsection 247(4) of the Act deems a taxpayer to not have made such reasonable efforts unless they have:

  1. made or obtained documentation addressing certain required details with respect to a transaction on or before the due date for the tax return for the applicable year;
  2. for each subsequent year that particular transaction persists, updated the documentation to address any material changes to such details; and
  3. provided a copy of this documentation within three months of a demand by CRA.

The details required to be addressed are as follows:

  1. the property or services to which the transaction relates;
  2. the terms and conditions of the transaction and their relationship, if any, to the terms and conditions of each other transaction entered into between the participants in the transaction;
  3. the identity of the participants in the transaction and their relationship to each other at the time the transaction was entered into;
  4. the functions performed, the property used or contributed and the risks assumed, in respect of the transaction, by the participants in the transaction;
  5. the data and methods considered and the analysis performed to determine the transfer prices or the allocations of profits or losses or contributions to costs, as the case may be, in respect of the transaction; and
  6. the assumptions, strategies and policies, if any, that influenced the determination of the transfer prices or the allocations of profits or losses or contributions to costs, as the case may be, in respect of the transaction.6

There are no requirements in the Act that contemporaneous documentation be prepared by a third-party advisor, or even by anyone with formal economic training. This documentation is not filed by a taxpayer with their annual tax returns or otherwise, except in response to a request by CRA. The schedules to the tax return detailing the quantum and nature of transactions that are subject to the transfer pricing rules7 do ask taxpayers to indicate whether or not they have made or obtained contemporaneous documentation.

Canada has not adopted the OECD master file and local file format for contemporaneous documentation. However, Canada has incorporated the country-by-country reporting requirements into the Act.

Presenting the case

i Pricing methods

The OECD Guidelines are not incorporated into Canadian law, and there are no other legal provisions requiring the use of any specific pricing methodology or establishing a hierarchy of preferred methodology. It is therefore up to a taxpayer to choose, and convince CRA and a court (if necessary) of the most appropriate methodology. CRA's administrative guidance historically stated that a hierarchy did exist, with the comparable uncontrolled price (CUP) method most preferred, followed by the other 'transactional' methods, with profit-based methods generally being least preferred. However, CRA has more recently disavowed this position.8 On the basis of recent experience, CRA appears to be defaulting to the profit split methodology in many more cases in recent years.

Of the decided court cases in Canada, several make reference to the methodologies described in the OECD Guidelines (most commonly the CUP method), but not all do so. There have been cases where both the government and taxpayer relied on a synthetic analysis of the various components of the receivables factoring transaction at issue, as no recognised methodology could be readily applied,9 and where a court10 was satisfied that pricing for a guarantee fee was at arm's length based on evidence that it produced a net benefit to the taxpayer, without reliance on a formal transfer pricing methodology.

It has long been CRA's policy that 'use of statistical measures, such as an interquartile range, does not necessarily enhance the reliability of the comparable data considered in producing a range.'11 CRA has also indicated that it is of the view that multi-year data is not reliable for purposes of determining prices in a particular year, and that 'taxpayers should not average results over multiple years for the purpose of substantiating their transfer prices in an audit context.'12 These views of CRA are not specifically reflected anywhere in Canadian law.

ii Authority scrutiny and evidence gathering

CRA has extensive audit powers under the Act, including the power to review books and records of a taxpayer,13 to require the production of documents and information located in Canada (whether relevant to the tax affairs of the person being required to produce the information of those of another named or un-named taxpayer),14 and to require the production of documents or information located outside Canada.15 CRA also has the power16 to seek a judicial order requiring compliance with a demand to review books and records or a requirement to produce documents or information located in Canada. Search warrants are provided for in the Act, but generally are restricted to criminal investigations. Finally, the Act grants CRA the power to convene a formal inquiry for purposes of the administration or enforcement of the Act,17 though this provision is infrequently used.

CRA makes frequent use of these audit powers, although information is almost always sought first directly from the taxpayer under audit through a less formal audit query. CRA will also make requests of its many treaty partners under the exchange of information provisions of Canada's many tax treaties and tax information exchange agreements, when it believes that parties in other jurisdictions may have access to information that it cannot otherwise obtain.

It is very common for CRA queries in a transfer pricing audit to be extensive, extending to all documents and information relating to a particular transaction, including in some cases analyses that the taxpayer has not undertaken for his or her own purposes (e.g., segmented financial statements). With the increasing frequency of reliance on profit split methodologies, it is also increasingly common for CRA to ask broad-ranging questions about non-Canadian entities and their financial position.

CRA will often request to interview many employees of a taxpayer, often including many outside Canada, to assist in developing its own views of transactions under audit. A recent case18 called into question the extent to which CRA officials can require a corporate taxpayer to make employees available for oral interviews to respond to questions from CRA auditors. As a result, the 2021 Canadian federal budget proposes amendments to the Act to reverse this decision and 'confirm that CRA officials have the authority to require persons to answer all proper questions, and to provide all reasonable assistance, for any purposes related to the administration and enforcement of the relevant statute.' Despite this innocuous wording, the proposed amendment could provide the CRA with significantly expanded audit powers including granting the CRA the authority to require persons to respond to questions orally or in writing 'in any form specified by the relevant CRA official'. Those words have the potential to be interpreted very broadly, and in a manner that is fundamentally inconsistent with well-established jurisprudence and audit practices. At the extreme, such a rule could potentially require taxpayers to expend significant resources to produce documents and information that they do not otherwise maintain (and are not required to maintain) in their books and records. It remains to be seen how broadly the CRA, and the courts, will interpret such an expansion of the statutory audit powers.

Intangible assets

The treatment (often even the existence) of 'intangibles' remains a contentious issue in many transfer pricing audits in Canada. As noted above, the current state of the law makes it difficult to justify reliance on the more economic theory-based doctrines discussed in the current version of the OECD Guidelines. CRA does not agree, and regularly relies on the treatment intangibles in the OECD Guidelines, including the product of the BEPS project, to support its audit positions. This may be an area to watch for future court cases to clarify.

Settlements

Settlements generally are possible at all stages of the tax audit, appeal or litigation process. Settlement of tax disputes is required to be done on a 'principled' basis in Canada; the settlement must reflect a possible outcome that a judge could have reached following a full hearing of the case, and cannot rely on a desire of either or both parties to avoid the costs and risks of litigation to justify the agreed outcome. This restriction can be a real hurdle to settlement of some cases on a practical basis; transfer pricing cases usually admit to sufficient subjectiveness on the issue of an arm's-length price that settlement can be easier to justify.

Either the taxpayer or the government can propose a settlement. If a settlement is entered into at the audit or administrative appeals stage, the taxpayer will generally be required to file a waiver of objection and appeal rights waiving their right to challenge the agreed outcome. Such a waiver will not apply to waive the right to seek assistance from the competent authorities under an applicable treaty to relieve any resulting double taxation.

Settlements entered into at the litigation stage will generally be reflected in more formal agreements or 'minutes of settlement'. At earlier stages, there is much flexibility to memorialise the arrangement to achieve the required level of certainty of outcome for both parties. In either case, settlements are almost always entered into on a 'without prejudice' basis with respect to the underlying issue, and will not constitute a legally binding precedent. They of course can be of practical value for similar issues in later taxation years.

A settlement of a transfer pricing matter will usually be reached with the audit team or the administrative Appeals team (either directly or as the party instructing counsel at litigation). The Competent Authority Services Division of CRA is separate from both of these groups; as such, a settlement will rarely form the basis of a formal APA. However, resolution of a contentious audit will often be a strong motivation for a taxpayer to seek and APA to avoid further audit cost and uncertainty going forward.

Investigations

CRA will usually start a transfer pricing audit by issuing a formal request for a taxpayer's contemporaneous documentation, which must be delivered within three months of request if it is to assist a taxpayer in avoiding potential penalties. A review of the contemporaneous documentation is followed by a series of written queries and often one or more requests for interviews of taxpayer employees within and outside Canada. There will usually be a specialised International Auditor, part of the local audit team, in charge of a transfer pricing audit. They will often be supported by economists and analysts working out of CRA's International Tax Division in Ottawa.

The auditor will issue a proposal letter outlining any proposed adjustments, and the facts and reasons they rely on in support of this position. Taxpayers generally are given 30 days to respond to a proposal, though extensions can be granted where justified and where limitation periods are not a concern.

If the recharacterisation rule is proposed, CRA's administrative policy is that a more formal three-stage process is required with three referrals of varying detail being made to the Transfer Pricing Review Committee (TPRC), a committee of more senior CRA personnel focusing on transfer pricing and other international issues, for consideration. CRA's policy is that the audit team must share with the taxpayer only their summary of the facts for review and comment in connection with the second, main, referral to the TPRC.

There are no time limits specifically governing the initiation or conduct of a transfer pricing audit, though both domestic and treaty-based limitations will restrict the timing of permissible adjustments. Under the Act, an extended limitation period applies to transfer pricing matters. This period runs from the original mailing of a notice of assessment for the relevant taxation year, and the extended period is generally six years from that date for individuals and 'Canadian-controlled private corporations', and seven years from that date for other corporations. Limitation periods under either the transfer pricing article or the mutual agreement procedure article of an applicable tax treaty can shorten those limitation periods.

A taxpayer who disagrees with a reassessment can file a notice of objection within 90 days, setting out the facts and reasons supporting their position. The CRA Appeals division currently has a large backlog; it can take up to 12 months for an Appeals officer to be assigned to the case. It can take many months or years after that to resolve a matter, especially a large and complex one.

Litigation

i Procedure

A taxpayer has an automatic right to appeal a case to the Tax Court of Canada if he or she disagrees with the decision reached by CRA Appeals. The taxpayer also has the right to circumvent the CRA Appeals process by appealing to the Tax Court of Canada at any time following the 90th day after filing a notice of objection. Either party may appeal the decision of the Tax Court of Canada as of right to the Federal Court of Appeal. Leave must be sought to appeal a case further to the Supreme Court of Canada, which is Canada's highest court. The Tax Court of Canada will decide on matters of fact and law. The higher courts can substitute their own views on a matter of law but will show deference to the Tax Court of Canada on all findings of fact, reviewing them based on a heightened 'palpable and overriding error' standard.

Timelines can vary greatly; depending on the nature of the issues and their dependence on complex facts, anywhere from two to five years may be needed from filing the initial Notice of Appeal to a complete trial at the Tax Court of Canada, though there are many examples of cases taking longer.

Transfer pricing cases in Canada almost always rely on expert economic or industry opinion evidence given in support of the pricing positions taken. There are specific limits on the number of experts that can be called, though a judge will have some discretion to control the process. Any expert must be properly qualified to offer insights that a court would not otherwise be able to appreciate in order to be permitted to offer opinion evidence.

ii Recent cases

There have been several important transfer pricing cases litigated in the Canadian courts, only a few of which are referred to below.

The GlaxoSmithKline case19 dealt with the pricing of ranitidine, a pharmaceutical ingredient in the brand name anti-ulcer drug Zantac. The Canadian taxpayer in that case purchased ranitidine from a related non-resident and, in accordance with a separate licence agreement with another related non-resident, it manufactured and marketed the drug under the trademark Zantac. In this case the Supreme Court of Canada made several important findings, including the comment that the OECD Guidelines, while they 'contain commentary and methodology pertaining to the issue of transfer pricing, … [they] are not controlling as if they were a Canadian statute.' The Supreme Court also emphasised that a proper transfer pricing analysis must consider the perspectives of both parties and must take into account all economically relevant circumstances.

The Cameco case20 involved transactions between a Canadian parent company, a publicly traded miner and distributer of uranium, and its Swiss subsidiary. This case is important because it is the first substantive consideration by the courts of the recharacterisation rule in Paragraphs 247(2)(b) and (d) of the Act. Both the Tax Court of Canada and the Federal Court of Appeal rejected the government's argument that recharacterisation was possible if the particular Canadian taxpayer would not have transacted with a third party in the same way as it did with its subsidiary, which effectively would require each member of a multinational group to transact as if it were completely independent and not a member of a group. Instead, recharacterisation was found to be permitted only if the transactions undertaken were 'commercially irrational'.21 The Tax Court of Canada also emphatically refused to accept the argument that the transactions could be ignored as a 'sham', which the government asserted based on a lack of employees and an alleged lack of substance in the Swiss subsidiary. The Tax Court of Canada found instead that the transactions could be evaluated, in part, based on the terms of the various legal agreements that it entered into giving it ownership of assets, assuming risks, and sub-contracting other entities to provide services to make up for its lack of many employees. This was an important rejection of economic substance arguments that run counter to the valid legal rights and obligations of the parties at issue. The sham issue was not appealed to the Federal Court of Appeal.

Finally, the AgraCity case22 involved inter-company service arrangements between a Canadian entity and a related Barbados entity in connection with the sale by the Barbados entity, directly to Canadian farmers, of a glyphosate-based herbicide (ClearOut), a generic version of Bayer-Monsanto's RoundUp. The government advanced similar sham and economic substance-based arguments as it did in Cameco. Both the recharacterisation rule and the regular transfer pricing rule were argued as alternatives to the allegation of sham. The Tax Court of Canada was again emphatic in the rejection of these arguments. The court confirmed the following:

  1. the sham doctrine applies only when legal agreements fail to reflect the true transactions undertaken by the parties, as a result of an intention to deceive third parties as to the true nature of the relationship;
  2. recharacterisation will be available only where transactions are commercially irrational, as demonstrated by evidence; and
  3. an entity can be considered to perform functions, own assets and assume risks based on valid legal agreements entered into with related parties, even if it has no employees, and that there was at least no evidence brought in this case to suggest that arm's-length parties would not transact in this manner notwithstanding the commentary in the 2017 update to the OECD Guidelines and the discussion in the BEPS work product.

Secondary adjustment and penalties

CRA's longstanding practice of assessing withholding tax on secondary adjustments based on an alleged conferral of a benefit is now codified in Subsection 247(12) of the Act. The amount of a transfer pricing adjustment is deemed to be a dividend paid by a Canadian taxpayer to the counterparty in the transaction at issue and is subject to Canadian withholding tax on that basis. This applies even if there is no direct or indirect shareholding by the non-resident in the Canadian entity, as would be the case with sister entities or where the Canadian entity controls the non-resident. The Act also permits, but does not require, CRA to waive the assessment of a secondary adjustment if the amount of the adjustment is repatriated back to Canada. In practice, CRA requires a taxpayer to waive all objection and appeal rights (other than recourse to the competent authorities) in order for CRA to accept a repatriation at the audit stage.

As noted above, penalties of 10 per cent of the amount of a transfer pricing adjustment can be assessed if a taxpayer has failed to undertake reasonable efforts to determine and apply arm's-length transfer prices. This is deemed to be the case if taxpayers have not obtained and delivered the required contemporaneous documentation. Decisions on the assessment of penalties are referred by auditors to the TPRC, based on a summary of facts and submission from the auditor. Taxpayers have the opportunity to review this summary of facts and to include their own submissions for consideration by the TPRC. Penalty assessments are disputed in the same way as any other assessment or reassessment.

Recently, introduced changes to the Act provide that where multiple provisions could potentially apply to a transaction, the transfer pricing provisions apply first. Thus, for example, if deductible interest could be denied under both the transfer pricing provisions and Canada's thin-capitalisation rules, the transfer pricing rules apply first. Given that penalties are based on the size of transfer pricing adjustments, this ordering rule has the effect of maximising transfer pricing penalties.

Broader taxation issues

i Diverted profits tax, digital sales taxes and other supplementary measures

Canada has not considered the adoption of a diverted profits tax.

Canada has expressed a desire to address the challenges of the digital economy through multilateral initiatives, including in particular the OECD/Inclusive Framework work on Pillar One and Pillar Two. However, the government of Canada has grown impatient. Following on similar measures in other countries, the government reiterated in the 2021 Canadian federal budget its intention to introduce a new gross-revenue based Digital Services Tax (DST). The proposed DST will be imposed at a rate of 3 per cent on revenues from digital services that rely on data and content contributions from Canadian users. The DST would apply only to taxpayers meeting both the following thresholds (alone or together with group members):

  1. global revenue from all sources of €750 million or more in the previous calendar year, and
  2. in-scope revenue associated with Canadian users of more than C$20 million in the particular calendar year.

The DST is stated to take effect on 1 January 2022, while being specifically stated to be a temporary measure that is intended to be replaced by the agreed multilateral approach once that can be implemented. In an interesting move, likely designed to insulate the DST from potential claims for relief under an applicable tax treaty, the DST will not be implemented under the Tax Act, but instead under a separate statute. Under normal principles, the DST should usually be deductible, but it would not qualify for a credit against Canadian income tax otherwise payable.

ii Tax challenges arising from digitalisation

As noted above, the government of Canada remains committed to a multilateral approach to these issues, notwithstanding the introduction of the proposed DST as an interim measure. Specific details regarding the government of Canada's view on how the proposed Pillar One and Pillar Two concepts would be implemented are not available at this time.

iii Transfer pricing implications of covid-19

Canada provided some limited guidance and relief 23 in response to the covid-19 pandemic in respect of certain international tax issues, including, in particular, cross-border employment and the issues of residence, permanent establishment, and carrying on business in Canada. Canada has neither provided any indication of its views of the transfer pricing implications of covid-19, nor has it specifically adopted the OECD's guidance in this regard.

iv Double taxation

Canada has an extensive treaty network, and a very experienced Competent Authority Services Division (CASD) within CRA. Applications to CASD for relief from double taxation under the mutual agreement procedure (MAP) provisions of Canada's tax treaties can be made following the issuance of a notice of assessment or reassessment. Canada's treaties are not consistent in terms of the limitation periods and notice requirements applicable to MAP cases, and so each treaty should be carefully consulted.

MAP relief is most often sought in advance of recourse to the domestic appeals process, with that domestic appeals process being held in abeyance pending the possible resolution of the issue by the competent authorities. It is also possible to seek MAP relief after initially engaging with the domestic CRA Appeals group.

Only a few of Canada's existing treaties contemplate mandatory arbitration, most notably the treaties with the United States of America, the United Kingdom and Switzerland. Of these, there is some history of successful resolutions being achieved under the arbitration provisions of the Canada-US treaty, though the results of each case are confidential. Canada has notified that it generally is prepared for the arbitration provisions of the OECD's Multilateral Instrument (MLI) to apply to its covered agreements, with the 'final offer' process being the default, subject to agreement and negotiation with each applicable counterparty.

While Canada will always 'present' a case to the competent authority of another jurisdiction for relief when properly requested, it is CRA's policy to not negotiate any settlement in cases where certain anti-avoidance rules have been applied, including, in particular, the general anti-avoidance rule and the transfer pricing recharacterisation rule. As noted above, the application of the proposed DST may give rise to double tax that will not be eligible for MAP relief.

CASD is also active in negotiating bilateral APAs with Canada's treaty partners, and may also consider unilateral APAs in some circumstances.

Outlook and conclusions

Transfer pricing remains an area of particular focus for CRA, with many additional resources being specifically allocated by the government to the enforcement of 'international' tax rules in recent years. Taxpayers can expect this to be an area of continued audit focus and activity.

We can also expect to deal with many new developments in this area, in particular the implications of the proposed DST and any multilateral approach to the digital economy that is ultimately implemented, as well as the consultation paper, expected to be released in the summer or autumn of 2021, seeking input on yet-to-be-proposed changes to reform Canada's transfer pricing rules to address the shortcomings (perceived by the government, especially following recent case law) of these rules.

Footnotes

1 Jeffrey Shafer is a partner at Blake, Cassels & Graydon LLP.

2 See Peter Cundill & Associates Ltd. v. The Queen [1991] 1 C.T.C. 197 (Fed. T.D.), aff'd. [1991] 2 C.T.C. 221 (Fed. C.A.), and Canada v. McLarty [2008] SCC 26.

3 Canada v. Prévost Car Inc. [2009] FCA 57, affirming 2008, TCC 231.

4 The predecessor transfer pricing provision in the Act to the current Section 247.

5 Canada v. GlaxoSmithKline Inc. [2012] SCC 52, at Paragraph 20.

6 Paragraph 247(4)(a) of the Act.

7 Form T106.

8 CRA's Information Circular 87-2R – International Transfer Pricing was cancelled in 2020 (without replacement), with CRA explaining in a public notice on 6 February 2020 that this document was cancelled due to inconsistency with CRA's current interpretation and application of Canadian transfer pricing legislation and also due to the fact that it does not reflect updates to the OECD Guidelines.

9 McKesson Canada Corporation v. The Queen [2013] TCC 404.

10 General Electric Capital Canada Inc. v. H.M.Q. [2010] FCA 344, affirming 2009, TCC 563.

11 See CRA's Information Circular 87-2R – International Transfer Pricing (cancelled) at para. 34; https://www.canada.ca/en/revenue-agency/services/forms-publications/publications/ic87-2/international-transfer-pricing.html.

12 Transfer Pricing Memorandum TPM-16 - Role of Multiple Year Data in Transfer Pricing Analyses, 29 January 2015; https://www.canada.ca/en/revenue-agency/services/tax/international-non-residents/information-been-moved/transfer-pricing/16-role-multiple-year-data-transfer-pricing-analyses.html.

13 Section 231.1 of the Act.

14 Section 231.2 of the Act.

15 Section 231.6 of the Act.

16 Section 23.17 of the Act.

17 Section 231.5 of the Act.

18 Canada v. Cameco Corporation [2019] FCA 67, affirming 2017, FC 763.

19 Note 5 above.

20 Canada v. Cameco Corporation [2020] FCA 112, affirming 2018, TCC 195, leave to appeal to the Supreme Court of Canada denied.

21 There remains the second requirement for the application of the rule, that of tax motivation, which was not at issue in this case.

22 AgraCity Ltd. v. The Queen [2020] TCC 91.

23 https://www.canada.ca/en/revenue-agency/campaigns/covid-19-update/guidance-international-income-tax-issues.html.

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