CRA comments relating to the mooted BEPS impact on CRA transfer-pricing practices included:
- BEPS Actions 8 to 10 did not effect substantial changes, i.e., the underlying principles are the same.
- CRA hopes to have final guidance out (re BEPS changes) by November 2019 including clarifying the concepts of risk-free return and risk-adjusted return.
- Canada has not adopted the simplification measure concerning low-value-added intragroup services – so that, rather than accepting a flat markup on intragroup service-charges because of the OECD guidance, CRA will continue to rely on IC87-2R to govern intragroup pricing until adoption of a new measure.
- Once the financial transactions project is completed, CRA will provide guidance on how the BEPS changes apply in Canada.
- The Canadian penalty regime is not more rigorous than Action 13 – instead it is that CRA's audit process is more rigorous than in most jurisdictions.