Competent Authority Process in Canada and Related Mattrs J 主管机关在加拿大及相关事项 J.ppt

Outline What is transfer pricing and Canada’s Regulatory Environment? Deciding between appeals versus competent authority Overview of the Competent Authority Process in Canada Treaty Time Limits Update on arbitration under the 5th Protocol Secondary adjustments: current Issues Audit Settlements Current CRA Audit Trends (raising?both PE and Transfer Pricing Adjustments - Triple Tax) What is Transfer Pricing and Canada’s Regulatory Environment? Transfer Pricing Defined Transfer Pricing is: The price at which goods, services and intangibles are traded between non-arm’s length parties within a corporate group. When Transfer Pricing Issues Arise Transfer Pricing Issues Arise: Whenever goods, services (e.g. marketing, accounting) or intangibles (e.g. patent or trade mark rights) are transferred between related parties across international borders (and in some cases provincial). Importance of Transfer Pricing Since a change in transfer prices can result in a change in profits reported in a particular tax jurisdiction, tax authorities around the world have made transfer pricing a priority. Recent comments out of the U.S. suggest that transfer pricing may be more closely scrutinized in the future. While not addressing transfer pricing specifically, comments from the U.S. suggest that several tax loopholes may be restricted or shut down. Types of Manufacturers Types of Distributors Canada’s Regulatory Environment Section 247 of the Income Tax Act (ITA) Information Circular (IC) 87-2R – International Transfer Pricing IC 71-17R5 – Guidance on Competent Authority (CA) Assistance Under Canada’s Tax Conventions IC 94-4R – Advance Pricing Arrangements (APAs) IC 94-4R (Special Release) – APAs for Small Businesses Canada’s Regulatory Environment (cont’d) For transfer pricing issues, the main body of the legislation is found in Section 247 of the Income Tax Act (the “Act”) and the CRA’s guidelines as set forth in the Information Circular (“IC”) 87-2R. For the purp