CRA will assess the COVID impact on APAs on a case-by-case basis
What is the COVID-19 impact on: previously negotiated advance pricing arrangements (“APAs”); mutual agreement procedures (“MAPs”) that are currently being negotiated; and benchmarking analyses that are used to establish transfer pricing policies and prepare transfer pricing compliance documentation?
After noting that advance pricing arrangements (“APAs”) are generally undertaken on the base assumption that the future will be a reflection of the past, CRA indicated that although COVID-19 changes in business conditions might pose a challenge, CRA does not consider that there is any need for a formal general policy, and those circumstances will merely inform the APAs on a case-by-case basis. Regarding APAs that are currently being negotiated, there might be a need to use some limits or critical assumptions to point to a certain return within the range.
As for MAPs currently being negotiated, CRA does not expect an impact as long as those MAPs deal with pre-pandemic years.
Transfer-pricing benchmarking studies will continue to be based on the information gathered by CRA.