Transfer pricing in Canada starts with section 247 of the Income Tax Act. The whole Income Tax Act is available at Justice Canada.

The administrative position of the Canada Revenue Agency (CRA) is described in information circular IC 87-2R International Transfer Pricing available here on CRA website. The table of content of Chapter 15 of the CRA Audit Manual may also prove useful.

More informations is contained in the TP Memoranda series. The Canadian jurisprudence also offers some guidance. The CRA fully recognizes and applies the OECD Transfer Pricing Guidelines.

In addition to the ITA and TPM series (IC 87-2R is under revision), the CRA offers various forms and documents to ensure compliance with the Canadian transfer pricing tax provisions.

The CRA endorses the OECD Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations. Canada also approves, as a member country, every other OECD transfer pricing publications including the key documents listed below.

Section 247: Income Tax Act, RSC 1985, c 1 (5th Supp)

Canadian transfer pricing jurisprudence: click here

Canada Revenue Agency: Transfer Pricing and Documentation Requirements

Canada Revenue Agency: T106 Information Return of Non-Arm’s Length Transactions with Non-Residents

Canada Revenue Agency: IC87-2R International Transfer Pricing (CANCELLED in December 2019)

Canada Revenue Agency: Transfer Pricing Memoranda

TPM-01 – Referrals to the Transfer Pricing Review Committee (Archived / Cancelled)

TPM-02 – Repatriation of funds by Non-residents – Part XIII

TPM-03 – Downward Transfer Pricing Adjustments under Subsection 247(2)

TPM-04 – Third Party Information

TPM-05 – Contemporaneous Documentation (Archived / Cancelled)

TPM-05R – Requests for Contemporaneous Documentation

TPM-06 – Bundled Transactions

TPM-07 – Referrals to the Transfer Pricing Review Committee (Archived / Cancelled)

TPM-08 – The Dudney Decision: Effects on Fixed Base or Permanent Establishment Audits and Regulation 105 Treaty-Based Waiver Guidelines

TPM-09 – Reasonable efforts under section 247 of the Income Tax Act

TPM-10 – Advance Pricing Arrangement Rollback (Archived)

TPM-11 – Advance Pricing Arrangement (APA) Rollback

TPM-12 – Accelerated Competent Authority Procedure (ACAP)

TPM-13 – Referrals to the Transfer Pricing Review Committee

TPM-14 – 2010 Update of the OECD Transfer Pricing Guidelines

TPM-15 – Intra-group services and section 247 of the Income Tax Act

TPM-16 – Role of Multiple Year Data in Transfer Pricing Analyses

TPM-17 – The Impact of Government Assistance on Transfer Pricing

Canada Revenue Agency: RC4649 Country-by-Country Report

Canada Revenue Agency: IC71-17R5 Guidance on Competent Authority Assistance Under Canada’s Tax Conventions

Canada Revenue Agency: IC94-4R International Transfer Pricing: Advance Pricing Arrangements (APAs)

Canada Revenue Agency: IC94-4RSR Special Release – Advance Pricing Arrangements for Small Businesses

Canada Revenue Agency: Guidelines for Treaty-Based Waivers Involving Regulation 105 Withholding

Canada Revenue Agency: IC75-6R2 Required Withholding from Amounts Paid to Non-Residents Providing Services in Canada

Canada Revenue Agency: IC77-16R4 Non-Resident Income Tax

Canada Revenue Agency: IT177R2 Permanent Establishment of a Corporation in a Province

Canada Revenue Agency: RC17 Taxpayer Bill of Rights Guide: Understanding Your Rights as a Taxpayer

Canada Revenue Agency: Voluntary Disclosures Program

Finance Canada: Notices of Tax Treaty Developments

Finance Canada: Tax Treaties (bottom of page)

Finance Canada: Tax Information Exchange Agreements

Canada Revenue Agency: Memorandum of Understanding (arbitration procedure)

Canada Revenue Agency: Arbitration Board Operating Guidelines – Canada – United States

Canada Revenue Agency: Advance pricing arrangement (APA) Program Reports

Canada Revenue Agency: Mutual agreement procedure (MAP) program reports

Justice Canada: Customs Act (R.S.C., 1985, c. 1 (2nd Supp.))

Canada Border Services Agency: Memorandum D13-1-3 Customs Valuation – Purchaser in Canada

Canada Border Services Agency: Memorandum D13-3-1 Methods of Determining Value for Duty

Canada Border Services Agency: Memorandum D13-3-2 Related Persons

Canada Border Services Agency: Memorandum D13-4-5 Transaction Value Method for Related Persons

Canada Border Services Agency: D Memoranda D13 – Valuation

Pacific Association of Tax Administrators (PATA):

Transfer Pricing Documentation Package

PATA Transfer Pricing Documentation Package

PATA Mutual Agreement Procedure

PATA Bilateral Advance Pricing Arrangement

Foreign Affairs, Trade and Development Canada:

Trade and Investment Agreements

Canada-United States-Mexico Agreement (CUSMA)


The OECD Transfer Pricing Guidelines play a central role in transfer pricing around the world. In Canada, the IC 87-2R International Transfer Pricing endorsed the OECD Transfer Pricing Guidelines over 25 times.

More resources:

DRTP Consulting Inc.: Visit our BEPS resources page

OECD: Transfer Pricing Guidelines for Multinational Enterprises and Tax Administration (July 10, 2017)

OECD: Draft Handbook on Transfer Pricing Risk Assessment (April 30, 2013)

OECD: Comments received on the new Draft Handbook on Transfer Pricing Risk Assessment (September 23, 2013)

OECD: Discussion Draft on transfer pricing documentation and country-by-country reporting released for public comment

OECD: Comments received on Discussion Draft on transfer pricing documentation and country-by-country reporting

OECD: Paper on transfer pricing comparability data and developing countries released for comment

OECD: Exchange of information

OECD: OECD Model Tax Convention on Income and on Capital

OECD: Model Tax Convention on Income and on Capital: Condensed Version 2014

OECD: 2010 Report on the Attribution of Profits to Permanent Establishments

OECD: Multi-Country Analysis of Existing Transfer Pricing Simplification Measures

OECD: OECD Transfer Pricing Country Profiles
European Commission: Joint Transfer Pricing Forum

European Commission: Member States’ Transfer Pricing Profiles


Canadian transfer pricing jurisprudence

Tax Treaty Cases

Other Cross-border Tax Cases


The table of content of Chapter 15 reads as follow.
« 15.0 International Audit Issues
15.1.0 Introduction

15.2.0 Income of a Non-resident
15.2.1 Overview
15.2.2 Part XIII Tax
15.2.3 Part XIV Tax
15.2.4 Income Earned in Canada from an Office or Employment
15.2.5 Income from Business Carried on in Canada
15.2.6 Common Law Factors Connecting a Business to a Particular Place
15.2.7 Carrying on Business “with” vs. “in” Canada
15.2.8 Extended meaning of “Carrying on Business in Canada”
15.2.9 Agent or Servant vs. Independent Contractor
15.2.10 Treaty-protected Businesses
15.2.11 Withholding of Part I Tax – Income from Carrying on a Business in Canada
15.2.12 Disposition of Taxable Canadian Property by a Non-Resident
15.2.13 Treaty-protected Property
15.2.14 Waivers of Withholding Tax
15.2.15 Tax Calculations
15.2.16 Audit Considerations
15.2.17 Assessment Procedures
15.2.18 References
15.3.0 Part XIII Tax on Income from Canada of Non-Resident Persons
15.3.1 Legislative Authority
15.3.2 Income Taxed Under Part XIII
15.3.3 Withholding and Reporting Obligations of the Payer
15.3.4 Treaty Reduction of Part XIII Tax Rate
15.3.5 Election by a Non-Resident to be Taxed Under Part I
15.3.6 Non-resident Beneficiaries of Trusts
15.3.7 Audit Considerations Relating to Part XIII Tax
15.3.8 Other Interpretation Bulletins Relating to Part XIII Tax
15.4.0 Residency
15.4.1 Overview
15.4.2 Residency of Corporations
15.4.3 Trusts
15.4.4 Immigration – Becoming Resident in Canada
15.4.5 Emigration – Ceasing to be Resident in Canada
15.4.6 Residency for GST/HST Purposes
15.4.7 Audit Considerations
15.5.0 Foreign-Based Information and Documentation
15.5.1 Overview
15.5.2 Potential Conflict with Foreign Laws
15.5.3 Definition of “Foreign-based Information or Document”
15.5.4 Requirement to Provide Foreign-Based Information
15.5.5 Judicial Review of Foreign Information Requirement
15.5.6 Consequence of Failure
15.5.7 Documentation Submitted After the Requirement Due Date
15.5.8 Jurisprudence
15.6.0 Permanent Establishment
15.6.1 Permanent Establishment for Income Tax Purposes
15.6.2 Permanent Establishment for GST/HST Purposes
15.6.3 Supplies Between Permanent Establishments
15.6.4 Audit Considerations
15.6.5 Examples
15.6.6 Income Tax References
15.6.7 GST/HST References
15.7.0 Foreign Reporting Requirements
15.7.1 Overview
15.7.2 Rationale for the Foreign Reporting Rules
15.7.3 T1134-A and T1134-B
15.7.4 Required Disclosures and Related Tax Issues
15.7.5 Penalties
15.7.6 Audit Considerations for T1134 Information Returns (Foreign Affiliates)
15.7.7 T1135
15.7.8 Audit Considerations for T1135 Returns (Foreign Income)
15.7.9 T1141 and T1142
15.7.10 Audit Considerations for T1141 Returns (Transfers, Loans to Non-Resident
15.7.11 Non-resident Trusts versus Offshore Trusts
15.7.12 Application of FAPI Rules to Trusts
15.7.13 Application of Attribution Rules to Trusts
15.7.14 Audit Steps to Verify Compliance with Foreign Reporting Requirements
15.7.15 Procedure for Requesting Foreign Reporting Returns
15.7.16 Additional Information
15.8.0 Non-Arm’s Length Transactions with Non-Residents
15.8.1 T106 Overview
15.8.2 T106 Form Contents
15.8.3 T106 as an Audit Tool
15.8.4 T106 Risk Assessment
15.9.0 Transfer Pricing
15.9.1 Overview
15.9.2 The Arm’s Length Principle
15.9.3 Taxpayers’ Responsibility
15.9.4 Transfer Pricing Penalties —Reasonable Effort
15.9.5 Advance Pricing Arrangements
15.10.0 Tax Havens
15.10.1 Tax Haven Audit Guide
15.10.2 Tax Haven Grids
15.10.3 International Tax Alerts
15.10.4 International Tax InfoZone Site
15.10.5 Auditing in a Tax Haven Environment
15.10.6 Taxpayer-Specific Knowledge
15.10.7 T106 Audit Guide
15.10.8 Foreign Reporting Audit Guide
15.10.9 NR4
15.10.10 Section 116 Audit Guide & Reference Manual
15.10.11 Other Tax Administrations
15.11.0 Tax Treaties
15.11.1 Overview
15.11.2 The Income Tax Conventions Interpretation Act
15.11.3 General Anti-Avoidance Rule (GAAR)
15.11.4 Relief from Double Taxation
15.11.5 If No Treaty Exists
15.11.6 Permanent Establishment
15.11.7 Income from Real Property (or Immovable Property)
15.11.8 Business Profits
15.11.9 Capital Gains
15.12.0 Other International Tax Services
15.12.1 Film Services Unit
15.12.2 Foreign Accrual Property Income (FAPI) & Foreign Affiliates QUESTIONS RELATING TO FOREIGN AFFILIATES
15.12.3 Foreign Investment Entity (FIE)
15.12.4 Competent Authority Division
15.12.5 Exchange of Information & Simultaneous Audit Programs
15.12.6 TSO International Tax Team »


Information circular IC 87-2R International Transfer Pricing, the administrative position of the Canada Revenue Agency (CRA) regarding transfer pricing in Canada, has been cancelled by the CRA in December 2019 The CRA announced that it would be updated and replaced by a new administrative position more in line with the Revised OECD Guidelines issued in July 2017.