Canadian TP ruling favours taxpayer
May 25, 2011
Sophie Ashley - TPW
In the latest transfer pricing case to emerge in Canada, the taxpayer has won a judgment from the Tax Court over reassessments made by the Canada Revenue Agency (CRA) worth about C$2.7 million ($2.7 million) even though the taxpayers’ transactions were found to contravene the arm’s-length principle.
The taxpayer, Alberta Printed Circuits (APC), appealed the CRA’s reassessments for the 1999, 2000 and 2001 tax years, under paragraph 247(2)(a) of the Income Tax Act, saying the CRA used the wrong method to determine the arm's-length value of set-up fees paid by the manufacturer to a related offshore company.
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