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2021 | OriginalPaper | Chapter

Canada

Authors : Bruno Amancio de Camargo, Émilie Granger

Published in: Intangibles in the World of Transfer Pricing

Publisher: Springer International Publishing

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Abstract

There is no specified framework for intangible properties (IP) in Canadian tax law other than the general provisions applicable to various types of property. Canada’s transfer pricing regime abides by the arm’s length principle. In its application of the arm’s length principle, Canada generally follows the OECD Guidelines.

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Canada Revenue Agency (2018); Corporation tax rates. https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/corporations/corporation-tax-rates.html.

Government of Canada. Minister of Justice (2018), Income Tax Act. Section 152. http://laws-lois.justice.gc.ca/eng/acts/I-3.3/.

The 2018 Federal Budget, released February 27, 2018, proposed an amendment that broadens this extended reassessment period to include all income arising in connection with a foreign affiliate of a taxpayer. A separate amendment extends the reassessment period by an additional 3 years in situations where a taxpayer carries back a loss incurred as a result of a transaction with a non-arm’s length non-resident person. These provisions apply to taxation years beginning on or after February 27, 2018.

Supra note 1.

Government of Canada. Minister of Justice (2018), Income Tax Act. Section 233(1). http://laws-lois.justice.gc.ca/eng/acts/I-3.3/.

Canada Revenue Agency (2018), T106 Information Return of Non-Arm’s Length Transactions with Non-Residents. http://www.cra-arc.gc.ca/E/pbg/tf/t106/README.html.

Organisation for Economic Co-operation and Development (2017), OECD Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations. France: OECD Publishing.

Canada Revenue Agency (2012), Transfer Pricing Memorandum 14—2010 Update of the OECD Transfer Pricing Guidelines. http://www.cra-arc.gc.ca/tx/nnrsdnts/cmmn/trns/tpm14-eng.html.

Vincent (2015), Transfer Pricing in Canada. Canada: Carswell, a division of Thomson Reuters Canada Limited.

Canada Revenue Agency. (1999). Information Circular 87-2R: International Transfer Pricing. http://www.cra-arc.gc.ca/E/pub/tp/ic87-2r/README.html.

Canada Revenue Agency (2005), IC 71-17R5—Guidance on Competent Authority Assistance under Canada’s Tax Conventions. http://www.cra-arc.gc.ca/E/pub/tp/ic71-17r5/README.html.

Canada Revenue Agency (2001), Information Circular 94-4R—Advance Pricing Arrangements. http://www.cra-arc.gc.ca/E/pub/tp/ic94-4rsr/README.html.

Canada Revenue Agency (2005), Information Circular 94-4R (Special Release)—Advance Pricing Arrangements for Small Businesses. http://www.cra-arc.gc.ca/E/pub/tp/ic94-4r/README.html.

Canada Revenue Agency (2018), Transfer Pricing Forms and Publications. https://www.canada.ca/en/revenue-agency/services/tax/international-non-residents/information-been-moved/transfer-pricing.html.

Department of Finance Canada (2018), Budget 2018. https://www.budget.gc.ca/2018/docs/plan/toc-tdm-en.html.

On October 31, 2012, the CRA published TPM-14—2010 Update of the OECD Transfer Pricing Guidelines which provides an overview of the significant changes made in the 2010 version of the OECD Guidelines and of the CRA’s position regarding these changes. The CRA may presumably release a similar publication presenting its position regarding the 2017 OECD Guidelines. Alternatively, the CRA may publish an update to IC 87-2R, which dates from 1999.

This is the definition provided by the Canadian Institute of Chartered Business Valuators (CICBV); see https://cicbv.ca/. The CICBV sets the practice standards for business valuation in Canada. The CICBV is a member of the International Valuation Standards Council, an independent, not-for-profit organization that acts as the global standard setter for valuation practice and the valuation profession. Valuations performed by Chartered Business Valuators (CBVs) retained as independent experts to provide a conclusion as to the value of shares, assets, or business interests are governed by the CICBV’s standards.

Canada Revenue Agency (2012), Transfer Pricing Memorandom 14—2010 Update of the OECD Transfer Pricing Guidelines. https://www.canada.ca/en/revenue-agency/services/tax/international-non-residents/information-been-moved/transfer-pricing/14-2010-update-oecd-transfer-pricing-guidelines.html.

IC 87-2R, supra note 13, at Part 3.B., Paragraph 115.

Ibid., at Part 5, Paragraph 145.

Ibid., at Part 2, Paragraphs 36 and 41.

Ibid., at Part 2, Paragraphs 37 to 40 and 42.

Canada Revenue Agency (2005), Transfer Pricing Memorandum 06—Bundled Transactions. http://www.cra-arc.gc.ca/tx/nnrsdnts/cmmn/trns/bndld-eng.html.

Supra, Note 22.

Francescucci/Henshall (2012). Determining a reasonable royalty. Transfer Pricing International Journal, BNA.

2017 OECD Guidelines, supra note 10 at Chapter 1: The Arm’s Length Principle. Section D. Guidance for applying the arm’s length principle. Sub-section D.1. Identifying the commercial or financial relations, Paragraph 1.36.

IC 87-2R, supra note 13, at Part 2, Paragraph 32.

Ibid., at Part 5, Paragraph 147.

Ibid., at Part 3.B., Paragraphs 96 to 105. Historically, the anticipated profits method is not the only approach that has been considered by the courts, but was generally the one applied in the latest decisions.

Francescucci/ Henshall, supra note 30.

IC 87-2R supra note 13 at Part 3.B., Paragraph 99.

Canada Revenue Agency. (2016). Transfer Pricing Memorandum 17—The Impact of Government Assistance on Transfer Pricing. http://www.cra-arc.gc.ca/tx/nnrsdnts/cmmn/trns/tpm17-eng.html.

Alternatively, taxpayers may file a notice of appeal with the TCC 90 days after filing an NOO.

Department of Finance Canada. (2014), Tax Treaties: In Force. https://www.fin.gc.ca/treaties-conventions/in_force%2D%2Deng.asp.

Canada Revenue Agency (2008), Transfer Pricing Memorandum 12—Accelerated Competent Authority Procedure. http://www.cra-arc.gc.ca/tx/nnrsdnts/cmmn/trns/tpm12-eng.html.

Canada Revenue Agency (2008), Transfer Pricing Memorandum11—Advance Pricing Arrangement Rollback. http://www.cra-arc.gc.ca/tx/nnrsdnts/cmmn/trns/tpm11-eng.html.

Canada Revenue Agency (2017), Advance Pricing Arrangement—Program Report—2017. https://www.canada.ca/content/dam/cra-arc/serv-info/tax/non-res/apapr2017/p_rprt2017-en.pdf.

Menyasz (2016), Canada to Aggressively Pursue Transfer Pricing Penalties. Transfer Pricing Report, BNA.

Department of Finance Canada. (2016). Budget 2016. http://www.budget.gc.ca/2016/docs/plan/toc-tdm-en.html.

Cameco Corporation v. The Queen (2018 TCC 195).

Vincent, supra note 12.

IC 87-2R, supra note 13, Part 5. Paragraph 148.

Department of Finance Canada (2008). Convention Between Canada and the United States of America.

Supra note 28.

Supra note 49.

Gouvernement du Quebec (2016), Budget 2016–2017.

Government of Saskatchewan (2017), Saskatchewan’s “Patent Box” Innovation Incentive Advancing the Province’s Growth Agenda.

Canada Revenue Agency (2018), RC4649—Country-by-Country Report.

Canada Revenue Agency (2018), RC4651—Guidance on Country-by-Country Reporting in Canada.

Alberta Treasury Board and Finance. (2018). Corporate Tax Rates. Retrieved from http://www.finance.alberta.ca/publications/tax_rebates/rates/hist1.html#corp.

Canada Revenue Agency. (1999). Information Circular 87-2R: International Transfer Pricing. Retrieved from http://www.cra-arc.gc.ca/E/pub/tp/ic87-2r/README.html.

Canada Revenue Agency. (2001). Information Circular 94-4R—Advance Pricing Arrangements. Retrieved from http://www.cra-arc.gc.ca/E/pub/tp/ic94-4rsr/README.html.

Canada Revenue Agency. (2005a). Information Circular 94-4R (Special Release)—Advance Pricing Arrangements for Small Businesses. Retrieved from http://www.cra-arc.gc.ca/E/pub/tp/ic94-4r/README.html.

Canada Revenue Agency. (2005b). Transfer Pricing Memorandum 06—Bundled Transactions. Retrieved from http://www.cra-arc.gc.ca/tx/nnrsdnts/cmmn/trns/bndld-eng.html.

Canada Revenue Agency. (2005c). Information Circular 71-17R5—Guidance on Competent Authority Assistance under Canada’s Tax Conventions. Retrieved from http://www.cra-arc.gc.ca/E/pub/tp/ic71-17r5/README.html.

Canada Revenue Agency. (2008a). Transfer Pricing Memorandum 12—Accelerated Competent Authority Procedure. Retrieved from http://www.cra-arc.gc.ca/tx/nnrsdnts/cmmn/trns/tpm12-eng.html.

Canada Revenue Agency. (2008b). Transfer Pricing Memorandum 11—Advance Pricing Arrangement Rollback. Retrieved from http://www.cra-arc.gc.ca/tx/nnrsdnts/cmmn/trns/tpm11-eng.html.

Canada Revenue Agency. (2012). Transfer Pricing Memorandum 14—2010 Update of the OECD Transfer Pricing Guidelines. Retrieved from http://www.cra-arc.gc.ca/tx/nnrsdnts/cmmn/trns/tpm14-eng.html.

Canada Revenue Agency. (2016). Transfer Pricing Memorandum 17—The Impact of Government Assistance on Transfer Pricing. Retrieved from http://www.cra-arc.gc.ca/tx/nnrsdnts/cmmn/trns/tpm17-eng.html.

Canada Revenue Agency. (2017a). Advance Pricing Arrangement—Program Report—2017. Retrieved from https://www.canada.ca/content/dam/cra-arc/serv-info/tax/non-res/apapr2017/p_rprt2017-en.pdf.

Canada Revenue Agency. (2017b). T106 Information Return of Non-Arm’s Length Transactions with Non-Residents. Retrieved from http://www.cra-arc.gc.ca/E/pbg/tf/t106/README.html.

Canada Revenue Agency. (2018a). Transfer Pricing Forms and Publications. Retrieved from http://www.cra-arc.gc.ca/tx/nnrsdnts/cmmn/trns/menu-eng.html.

Canada Revenue Agency. (2018b). Pacific Association of Tax Administrators (“PATA”) Transfer Pricing Documentation Package. Retrieved from https://www.canada.ca/en/revenue-agency/services/tax/international-non-residents/information-been-moved/transfer-pricing/pacific-association-tax-administrators-pata-transfer-pricing-documentation-package.html.

Canada Revenue Agency. (2018c). Corporation Tax Rates. Retrieved from https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/corporations/corporation-tax-rates.html.

Canada Revenue Agency. (2018d). RC4649—Country-by-Country Report. Retrieved from http://www.cra-arc.gc.ca/E/pbg/tf/rc4649/README.html.

Canada Revenue Agency. (2018e). RC4651—Guidance on Country-by-Country Reporting in Canada. Retrieved from http://www.cra-arc.gc.ca/E/pub/tg/rc4651/README.html.

Department of Finance Canada. (2008). Convention Between Canada and the United States of America. Retrieved from https://www.fin.gc.ca/treaties-conventions/USA_-eng.asp.

Department of Finance Canada. (2014). Tax Treaties: In Force. Retrieved from https://www.fin.gc.ca/treaties-conventions/in_force%2D%2Deng.asp.

Department of Finance Canada. (2016). Budget 2016. Retrieved from http://www.budget.gc.ca/2016/docs/plan/toc-tdm-en.html.

Department of Finance Canada. (2017). Budget 2017. Retrieved from http://www.budget.gc.ca/2017/docs/plan/toc-tdm-en.html.

Department of Finance Canada. (2018). Budget 2018. Retrieved from https://www.budget.gc.ca/2018/home-accueil-en.html.

Francescucci & Henshall. (2012). Determining a Reasonable Royalty. Transfer Pricing International Journal, BNA.

Gouvernement du Quebec. (2016). Budget 2016–2017. Retrieved from http://www.budget.finances.gouv.qc.ca/budget/2016-2017/index_en.asp.

Government of Canada. Minister of Justice. (2018). Income Tax Act. Retrieved from http://laws-lois.justice.gc.ca/eng/acts/I-3.3/.

Government of Saskatchewan. (2017). Saskatchewan’s “Patent Box” Innovation Incentive Advancing the Province’s Growth Agenda. Retrieved from https://www.saskatchewan.ca/government/news-and-media/2017/april/04/patent-box.

Menyasz. (2016). Canada to Aggressively Pursue Transfer Pricing Penalties. Transfer Pricing Report, BNA.

Organisation for Economic Co-operation and Development. (2010). OECD Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations. France: OECD Publishing.

Organisation for Economic Co-operation and Development. (2017). OECD Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations. France: OECD Publishing.

Revenue Québec. (2018). CALCUL DE L’IMPÔT SUR LE REVENU D’UNE SOCIÉTÉ. Retrieved from https://www.revenuquebec.ca/fr/entreprises/impots/impot-des-societes/declaration-de-revenus-des-societes/calcul-de-limpot-sur-le-revenu-dune-societe/.

The Canadian Institute of Chartered Business Valuators. (2018). Retrieved from https://cicbv.ca/.

Vincent. (2015). Transfer Pricing in Canada. Canada: Carswell, a division of Thomson Reuters Canada Limited.

Title: Canada
Authors: Bruno Amancio de Camargo
Émilie Granger
Publisher: Springer International Publishing
Book: Intangibles in the World of Transfer Pricing
Print ISBN: 978-3-319-73331-9

Electronic ISBN: 978-3-319-73332-6

Copyright Year: 2021
DOI: https://doi.org/10.1007/978-3-319-73332-6_26

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