The Lexpert Guides to the Leading US/Canada Cross-Border Corporate and Litigation Lawyers in Canada profiles leading business lawyers and features articles for attorneys and in-house counsel in the US about business law issues in Canada.
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TRANSFER PRICING TAXING TRANSFER PRICING BY SANDRA RUBIN PHOTOGRAPHY BY PHILIPPE LANDREVILLE TRANSFER PRICING IS BEING AUDITED MUCH MORE AGGRESSIVELY BY CANADA'S TAX AUTHORITIES FORGET THE LEGENDARY niceness. Canada may not be hauling the CEOs of multinationals before public hearings for tax shaming as they have been in the UK, but the Canada Revenue Agency (CRA) is all over transfer pricing. People who work in the area say there is a no-holds-barred attitude with the CRA being extremely assertive in examining the way multinationals account for profits between companies, and calling them out when it suspects goods and services are priced to minimize the Canadian tax paid. "Transfer pricing has progressively been audited more and more aggressively," says Emma Purdy, a former CRA international auditor who is now leader, financial services tax and transfer pricing at PricewaterhouseCoopers LLP. "Canada, and the CRA, is probably one of the more aggressive tax authorities. There have been numerous surveys over the years that looked at audit activity and which tax authorities are generating adjustments, and CRA certainly ranks right up there." The agency has "greatly increased" the number of international auditors right across the country, says Thomas Akin, a senior tax partner with McCarthy Tétrault LLP. "What that means is that at ground level, or the tax service-office level, you now have international auditors whose sole focus is transfer pricing," says Akin. "The US led the charge several years ago but countries like Canada beefed up their audit resources in the transfer price area, and that's led to a lot of reassessing activity, which has caused a lot of issues. There's been a lot going on." www.lexpert.ca | LEXPERT • June 2013 | 29 B-00-Features.indd 29 13-05-17 9:34 AM