Canada Transfer Pricing Policy

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Manager Cindy Victoria Speaks in Bahasa, English, and Chinese.
Whats App +886-989-808-249
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TP-Q-10
Why kinds of scenarios will be adopted TP policy? What is the relevance between DTA and TP policy?

TP-A-10
When Canada Tax entity would like to pay out whatever Business profits, Royalty, Technical Services fees, Interests, Trading amount etc., it will adopt DTA tax rate. Its judge criteria, please see the Canada Treaty Page.
But if want to verify the above-mentioned amount if reasonable, will adopt Canada TP Policy.

TP-Q-20:   
What are the scenarios in Canada, that a Wholly Foreign-Owned Entity (WFOE) is exempted from compliance of Transfer Pricing (TP) declaration and TP documentation?

TP-A-20:
WFOE is exempted from TP declaration – Form T106 if the total non-residents transactions value does not exceeding CAN 1 million.
WFOE is exempted from TP documentation – CbC Report – Form RC4649 – If total consolidated group revenue is less than Euro 750 million in the immediately preceding fiscal year.

TP-Q-30:   
What are the scenarios in Canada, that a Wholly Foreign-Owned Entity (WFOE) is required to submit TP declaration to the country’s tax bureau?
What is the name of the TP declaration form?

TP-A-30:
Form T106 – Total non-residents transactions value is exceeding CAN 1 million.
Form T1134 – All taxpayer’s residents in Canada for which a non-resident corporation is a foreign affiliate or a controlled foreign affiliate at any time in the year.

TP-Q-40:   
What are the scenarios in Canada, that a Wholly Foreign-Owned Entity (WFOE) is required to submit TP declaration and TP documentation to country’s tax bureau? What is the name of the TP declaration form and TP documentation form?

TP-A-40:
TP declaration – Form T106 – If total non-residents transactions value exceeding CAN 1 million.
TP declaration – Form T1134 – All taxpayer’s residents in Canada for which a non-resident corporation is a foreign affiliate or a controlled foreign affiliate at any time in the year.
TP documentation – CbC Report – Form RC4649 – If total consolidated group revenue is less than Euro 750 million in the immediately preceding fiscal year.

Canada TRANSFER PRICING for professionals

Overview

Canadian transfer pricing legislation and guidelines are generally consistent with the OECD.
Canada’s transfer pricing rules apply if:

1. Two or more entities are involved.
2. At least one of the entities is a taxpayer in Canada.
3. It is a cross-border transaction involving Canada.

Related Party

Includes in the paragraph 251(2)(b) of the ITA, a corporation will be related to another corporation where:

1. The two corporations are controlled by the same person or group of persons.
2. Each of the corporations is controlled by one person and the person who controls one corporation is related to the person who controls the other corporation.
3. One of the corporations is controlled by one person and that person is related to any member of a related group that controls the other corporation.

Acceptable Transfer Pricing method

*Comparable Uncontrolled price method (CUP)
*Resale price method (RPM)
*Cost-plus method (CPM)
*Profit split method (PSM)
*Transactional net margin method (TNMM)

Due dates and respective threshold:

Please be aware below Warning:
The above contents are digested by Evershine R&D and Education Center in October 2021.
Regulations might be changed as time goes forward and different scenarios will adopt different options.
Before choosing options, please contact us or consult with your trusted professionals in this area.

Contact Us

Toronto Evershine BPO Service Limited Corp.
Email: yto4ww@evershinecpa.com
Manager Cindy Victoria Speak in Bahasa, English, and Chinese.
Whats App +886-989-808-249
wechatid: victoria141193

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Linkedin address: Dale Chen

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