People Mentioned
Partner, Tax, Toronto
Canadian rules governing intercompany transactions are being overhauled, providing the Canada Revenue Agency (CRA) with greater powers to adjust corporate tax bills. However, it will take years for the courts to interpret the changes, says Amanda Heale, partner, Tax, in an interview with Bloomberg Law News.
“In the meantime, the subjectivity and breadth of considerations that they inject into the transfer pricing analysis is certain to augment the scope and intensity of CRA audits and controversies,” says Amanda.
The changes were included in legislation enacting parts of Canada’s fiscal 2026 budget that passed March 26. The reforms increase penalties, tighten deadlines and make various administrative changes to the country’s transfer pricing rules.
This overhaul represents a significant departure from existing jurisprudence in how transfer prices are determined by the courts, creating uncertainty for companies seeking to ensure compliance with the law.
A mechanism has been included to ensure Canada’s rules align with the Organization for Economic Cooperation and Development’s transfer pricing guidelines.
The changes are in effect for tax years beginning after November 4, 2025, the day the federal budget was released. If you have a subscription to Bloomberg Law News, you can read the full article by author James Munson posted on March 27, 2026.
People Mentioned
Partner, Tax, Toronto
