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Proceed Canada announced certain international tax changes in its 2018 federal budget. TP Week’s correspondents Norma Kraay and Phil Fortier of Deloitte in Canada consider commentary indicating a continued focus on transfer pricing by the government.

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& Canada Canada’s 2018 federal budget, released February 27 2018, proposes new tax measures that will have an impact on multinational enterprises (MNEs). The changes with transfer pricing implications primarily involve extending the reassessment period in select circumstances as well as increased funding for the Canada Revenue Agency (CRA).

The budget also highlights Canada’s commitment to reinforcing substance requirements and aligning transfer pricing outcomes with value creation, and reiterates that Canada has adopted the revised OECD transfer pricing guidelines. Three of the tax measures announced in the budget are aimed at extending the period during which the CRA can issue a reassessment:                                                        1.       The extension by three years of the reassessment period for income arising in connection with a foreign affiliate.

By default, the CRA has a three or four-year period after the date of an initial assessment to make a reassessment. Currently, a three-year extended reassessment period is allowed in respect of a transaction involving the taxpayer and a related non-resident person. Read more from…

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