Background

The Canada Revenue Agency (CRA)’s Advance Pricing Arrangement (APA) program is administered through the CRA’s Competent Authority Services Division (CASD), which is part of the International and Large Business Directorate of the Compliance Programs Branch. Canada is highly respected at the international level for its longstanding APA program and is an active participant in working with other jurisdictions to identify possible improvements to the APA process.

The APA program is a service offered by the CRA to assist taxpayers in preventing transfer pricing disputes that could otherwise arise in future tax years. The main objective of the program is to provide increased certainty regarding future transfer pricing issues in a manner consistent with the Income Tax Act and guidance from the CRA and the Organisation for Economic Co-operation and Development (OECD).

The APA process is based on co-operation and transparency. The APA process differs from the CRA’s audit process as its focus is on prospective or future tax years rather than tax years that have elapsed. In essence, an APA is an arrangement between a taxpayer and a tax administration that sets out a transfer pricing methodology, to be used on a prospective basis, for establishing an arm’s length transfer price for cross-border transactions between related parties. Applying the arm's length principle is generally based on a comparison of the prices, or profit margins, that non-arm's length parties use or obtain, with those of arm's length parties engaged in similar transactions.

An APA process is started by a Canadian taxpayer through contact with the CASD. For more information on the CRA’s APA program, see Information Circular 94-4R, International Transfer Pricing: Advance Pricing Arrangements (APAs).

The latest report is provided below:

Reports

2022 APA Program report (HTML)

• 
  

  Download and print