SIMPLIFIED CANADIAN TRANSFER PRICING RULES
NEW RULES ADDRESS OLD PROBLEM: SMALLER BUSINESS DOCUMENTATION STANDARDS
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Canada’s transfer pricing rules were first introduced in 1997 and essentially require Canadian businesses transacting with related foreign parties – for example, buying, selling or licensing goods, services and intangibles within a multinational corporate group – to maintain written documentation explaining how their prices comply with internationally accepted arm’s length principles. The Canada Revenue Agency (“CRA”) has historically adopted the OECD Transfer Pricing Guidelines for that purpose.