global transfer pricing conference · 2016-10-28 · example of a transfer price per accounting...
TRANSCRIPT
Global Transfer Pricing ConferenceRegulatory developments in Canada
October 2016
www.pwc.com/transferpricing
The new normal – full TransParency
Global Transfer Pricing Conference │ October 2016
Today’s presenters
PwC │ 2
Gord JansCanada
Olivier Paul-HusCanada
Lav ChadhaCanada
Shiraj KeshvaniCanada
Global Transfer Pricing Conference │ October 2016
Agenda
PwC │ 3
Introduction1
TPM 17 and RevenuQuébec audit 2
TP dispute resolution 4
Panel Q&A 5
Global Transfer Pricing Conference │ October 2016
BEPS in action3
Global Transfer Pricing Conference │ October 2016
In-session polling
When requested, select the current session from the Agenda (main menu), tap on Participate and Polling.
PwC │ 4
Global Transfer Pricing Conference │ October 2016
TPM 17 and Revenu Québec audit
PwC │ 6
Impact of government assistance on a transfer pricing analysis
• Released March 2, 2016
• Provide guidance on the treatment of government assistance when using a cost based method to determine the transfer prices
• CRA presumes that the Canadian taxpayer will keep the government assistance unless it can be proven that arm's length enterprises would effectively share all or part of that assistance
Revenu Québec transfer pricing audit
• New audit area for Revenu Québec
• Possibility of economic double taxation
Global Transfer Pricing Conference │ October 2016
Example of a transfer price per accountingtreatment and CRA guidance
PwC │ 7
Global Transfer Pricing Conference │ October 2016
Polling question 1
A. Reduce the cost base by the amount of
governmental assistance
B. Do not reduce the cost base by the
amount of governmental assistance.
C. This situation does not apply to us
D. PwC participant
How is your company treating
governmental assistance under
a cost plus transfer pricing
policy?
PwC │ 8
Global Transfer Pricing Conference │ October 2016
Polling question 2
A. Yes
B. No
C. PwC participant
Has your company ever
faced a provincial transfer pricing
audit?
PwC │ 9
Global Transfer Pricing Conference │ October 2016
BEPS in action
PwC │ 11
Canada’s influence seen in BEPS Guidelines
“The OECD developed a “responsible response” with its 15-point action plan to combat BEPS. [However] much of what it contains is heavily influenced by Canadian practice.”
“For us very much we see the [new] OECD guidelines as a clarification and extension of what has always existed in Canada to other jurisdictions”
Assistant Commissioner, Large Business and Investigation Branch, CRA.
Global Transfer Pricing Conference │ October 2016
BEPS in action
PwC │ 12
Recent tax court case for Marzen Artistic Aluminium
Great example of ‘accurate delineation of the actual transaction’ approach
The logic in the Marzen decision closely resembles the OECD’s recommended six steps to accurately delineate the actual transaction:
Use of contractual agreements as a starting point for delineating the actual transaction
1
Use of functional analysis and evidence to determine party(ies) performing control and management of risks vs. assumption of risks, and financial capacity to assume risks.
2
(Re)allocation of risks where functional analysis was not consistent with the contractual arrangement.
3
Pricing the accurately delineated transaction.4
Global Transfer Pricing Conference │ October 2016
Polling question 3
A. Significant
B. Limited
C. None
D. PwC participant
What degree of changes have you made to your TP arrangements in light of the BEPS
guidelines?
PwC │ 13
Global Transfer Pricing Conference │ October 2016
TP dispute resolution
PwC │ 15
MAP / APA process
• Current statistics
• Arbitration process
• CRA personnel
• Recent experiences
CRA audits
• Recent experiences
Global Transfer Pricing Conference │ October 2016
Polling question 4
A. Very comfortable
B. Somewhat comfortable
C. Not at all comfortable
D. PwC participant
How comfortable are you that your
business documents (i.e. evidence) aligns
to your TP documentation?
PwC │ 16
Global Transfer Pricing Conference │ October 2016
In-session Q&A
PwC │ 17
To submit questions electronically, select the current session from the agenda (on the main menu), and tap on Participate and Q&A.
Global Transfer Pricing Conference │ October 2016
Taking action
Proactive dispute prevention vs.
reactive dispute resolution strategies
Review your TP arrangements in
light of BEPS guidelines
Consider impact of TPM-17 on your cost
plus TP arrangements
PwC │ 19
Global Transfer Pricing Conference │ October 2016
What did you think?
PwC │ 20
At the end of the session, tap Session Survey and provide your rating on any or all survey questions. Tap submit response.
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