Canada Tax Agency Issues Guidance on Transfer Pricing Rules, Requirements for Related Party Transactions

The Canadian Revenue Agency Nov. 7 issued a guidance on the transfer pricing rules for transactions between members of the same multinational enterprise (MNE) group. Topics covered include: 1) the conditions for applying the transfer pricing rules; 2) the recordkeeping, documentation, and reporting requirements for non-arm’s length transactions with nonresidents; 3) information return and country-by-country (CbC) reporting obligations, and the audit period applicable to various types of taxpayers; 4) that taxpayers may be subject to a penalty equal to 10 percent of certain transfer pricing adjustments under the Income Tax Act if they fail to show reasonable efforts to determine ...