Tax services | Transfer pricing

Transfer pricing is usually not far from the top of a multinational company’s list of critical international tax issues. With tax authorities aggressively auditing corporations and using penalty provisions in the tax law to encourage compliance, now is the time to ensure that your company’s exposure to double taxation, penalties and interest is minimized while verifying that your transfer pricing policies contribute to a sound international tax strategy and a minimum worldwide effective tax rate.

Section 247 of the Income Tax Act (Canada) and OECD guidance require these transactions to be carried out at arm’s length prices. The tax jurisdiction on the other end of the transaction is also concerned about the transfer price used in the related-party transaction and is as interested as the CRA in protecting its country’s tax base.

Given that an arm’s length price is not the same as fair market value and that tax authorities may use different transfer pricing methods to assess the reasonableness of the same transfer price, pricing an intercompany transaction can be complicated.

We help our multinational clients establish arm’s length transfer prices and complete the analysis and documentation required—analysis and documentation that is also highly relevant for annual tax filings, their company’s tax provision and accounting disclosures, due diligence performed on businesses that carry on related-party transactions, and, of course, tax audits. We do this by assisting in

• establishing and maintaining arm’s length transfer pricing policies and systems,
• meeting documentation compliance requirements,
• managing tax authority audit controversy,
• navigating competent authority matters, and
• planning cost-effectively and proactively using advance pricing arrangements. 

Our transfer pricing specialists are called upon to analyze transfer pricing arrangements as part of financial statement audit procedures, international tax reorganizations, requests for prior-year downward adjustments, internal controls reviews and due diligence work. 

Experience, knowledge, global reach

Using our extensive capabilities and experience, we are able to carry out analyses, planning, documentation and controversy management worldwide. To accomplish this, we work closely with transfer pricing specialists in Grant Thornton International Ltd member firms around the world to ensure a balanced approach and compliance in all jurisdictions.