Update - Competent Authority Services Division

Advance pricing arrangement (APA) prefiling meeting

Question 1

How would a taxpayer interested in filing for an APA get a prefiling meeting?

Answer 1

A taxpayer interested in filing for an APA has to first send a request-information package to the director of the Competent Authority Services Division at the Canada Revenue Agency (CRA) to ask for an APA prefiling meeting. As much as possible, an APA request-information package should include all the information listed in Appendix I of the CRA's Information Circular 94-4R, International Transfer Pricing: Advance Pricing Arrangements (APAs). The Division will review the package and, if satisfied that it is complete, will contact the taxpayer with possible date(s) for a prefiling meeting.

Downward transfer pricing adjustments

Question 2 a)

Will the Canadian competent authority accept a case under the mutual agreement procedure (MAP) that involves a request by a Canadian entity to reduce its Canadian taxable income (downward transfer pricing adjustment) if the request relates to a self-initiated (that is, not initiated by a tax authority) adjustment to increase the income of a related entity in another country (upward adjustment)?

Answer 2 a)

The Canadian competent authority will accept a case under the MAP that involves a request for a downward adjustment in these circumstances:

• The upward adjustment has been accepted for consideration by the foreign tax authority;
• The foreign competent authority tries to resolve the case under the MAP. That is, the foreign country reviews the case, provides the Canadian competent authority with a detailed analysis as to why the foreign authority agrees with the adjustment and agrees to negotiate the case.
• The request for competent authority assistance is made within the time limits of the applicable treaty; and
• The issue is not one that the Canadian competent authority has decided, as a matter of policy, not to consider.

Question 2 b)

What will happen if one of the requirements above is not met (for example, the foreign competent authority does not accept the case)?

Answer 2 b)

If the above requirements are not met, the Canadian competent authority will close its MAP case. The taxpayer will then have the option to apply to the Audit Division of the local tax services office to ask for a downward adjustment, in accordance with the information in Transfer Pricing Memorandum TPM-03, Downward transfer pricing adjustments under subsection 247(2).

Certification of residency

Question 3

I will receive payments from a non-resident payer. The payer sent me a form issued by a foreign government that has to be completed by the Canadian competent authority to certify that I am a resident of Canada. Do I send this form to the CRA's Competent Authority Services Division, and what information do I have to provide?

Answer 3

No. It is not necessary to send your request for certification of residency to the Competent Authority Services Division. The CRA processes these requests in its taxpayer services regional correspondence centres. Canada's treaty partners generally accept these certifications. You can get information about certification of residency and how to get a certificate of residency on the CRA website at Certificate of residency.

Date modified:

2013-12-20