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22 March 2016

Effect of government assistance on transfer pricing in Canada discussed

Recently, the Canada Revenue Agency (CRA) released a new transfer pricing memorandum, TPM-17, dated March 2. This Memorandum, which reaffirms the CRA's existing informal position, provides guidance on the impact of government assistance, such as scientific research and experimental development credits or wage subsidies, on determining transfer prices between related parties. Taxpayers should give due consideration to this new CRA guidance in the development and documentation of their transfer pricing policies related to products or services where government assistance has been provided.

A Tax Alert prepared by Ernst & Young Canada, and attached below, provides additional details.

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Document ID: 2016-0540

 

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