Effective Resolutions For Transfer Pricing Disputes
Transfer pricing is the calculation of the price for goods and services charged by related companies across international borders. Our firm has been involved in disputes with Canada Revenue Agency over the transfer prices charged by Canadian companies.
The theory is that related parties must prove that the profits they report reflect an arm’s length price. If CRA determines that the profits taxed by Canada should have been greater, then they will reassess a company, and direct that the profits earned in Canada be adjusted.
The need for an independent advisor arises from the natural human tendency to justify one’s own work at any cost. PMR Law has extensive legal knowledge and experience with transfer pricing disputes that starts when the reassessment is received.
Serving clients throughout Alberta, British Columbia and across Canada, PMR Law provides comprehensive strategies based on the analytical work of top flight transfer pricing specialist advisors, whose opinions have been accepted and approved of in Tax Court of Canada cases.
Obtaining Privileged Advice
It is wise to work with your tax and transfer pricing advisors until their work is challenged. Once the pricing strategy has been challenged, it is time to involve someone new.
When this happens, you need to have your activities reviewed in a privileged manner by a law firm. You do not have to share a lawyer’s opinion in a court dispute as a lawyer’s advice is privileged.
Different Strategies For Different Situations
Transfer pricing is part of international tax law. While transfer pricing compliance is well known to major accounting firms, very few possess proven ability to litigate transfer pricing disputes. PMR Law has been successful in multiple cases.
Your team needs to engage an experienced advisor to have a second look at the merits of your position. You also need to evaluate whether arbitration is available to you, and appropriate for your case. PMR Law will advise you what to do once we have evaluated your case.
Alternatives To Competent Authority Resolutions
It may or may not be in your best interests to send a dispute to internal appeals within CRA, or to try to have tax authorities settle your dispute under a process known as Competent Authority.
Tax authorities may not advocate your position the way it should be advocated. Also, arbitration by Competent Authority may not be available.
PMR Law believes that it is better to have independent advice from a firm that can support you in either arbitration or a court case. PMR Law is one of the very few law firms that have presented successful transfer pricing issues to Tax Court of Canada. When faced with a reassessment, true due diligence involves hiring advisors that will assess the work of your advisors.
Determining Market Prices For Transactions
No two cases are exactly alike, and there are many different directions a transfer pricing dispute can take. Sometimes the pricing and justification has been well developed. In other cases, the transfer price was set without a true evaluation of the issues.
We can determine if market prices for similar transactions are available. Similar transactions, which are known as “CUPS”, have been approved of as the best evidence by Tax Court of Canada in the AP Circuits case. That case was won by a taxpayer who was represented by PMR Law.
A Variety Of Legal Services For Transfer Pricing Disputes
PMR Law offers successful trial experience coupled with an established network of experts. We apply our knowledge and expert opinions to every transfer pricing reassessment. More detailed examples of the services we provide to clients are:
- How to effectively defend an audit
- Explaining the tax appeal process
- Advising and evaluating the strength of your position
- Providing a legal opinion on privilege
- Effective legal strategies for businesses in Vancouver and surrounding areas
Effective Communication
We understand that a taxpayer wants to resolve transfer disputes as soon as possible. You must reconcile yourself to a long process. However, your final result is much advanced by being told where you stand on the merits at the earliest possible opportunity.
Our goal is to eliminate any legal obstacles that impede your business operations. We value the ability to articulate an understandable and strong case so that your arguments are on the table for tax authorities to review.
Our firm has been involved in the communication of the Canadian taxpayer’s position to national and international tax authorities. In situations where a reasonable solution is not possible, we are ready to advocate a reasonable position to the courts.
Book A Consultation
Contact Shaun T. MacIsaac, Q. C. of PMR Law in our Calgary office today at (403) 457-9600 or by email at [email protected] and find out how we can help.