Canada: CRA makes TP audits high priority
October 12, 2007
Ed Kroft and Deborah Toaze, of McCarthy Tétrault, explain the Canadian Revenue Agency ‘s focus on TP audits
Canada’s federal income tax rules relating to transfer pricing are set out in section 247 of the Income Tax Act. Section 247 requires that Canadian taxpayers utilise the arm’s length principle in setting transfer prices for transactions with non-arm’s length persons. Section 247 also contains transfer pricing documentation requirements and transfer pricing penalty provisions. The Canada Revenue Agency (CRA) is responsible for the dealing with transfer pricing issues under the Act.
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