OECD MAP Peer Review Report for Canada

By Robert Robillard - 28 September 2017

Within the work on BEPS action 14 Make Dispute Resolution Mechanisms More Effective, the OECD recently released the MAP Peer Review Report for Canada.

This report reviews the dispute resolution mechanisms available in Canada to address, among other things, double taxation.

Regarding the main findings, Canada is found to be deficient regarding the fact that:

  • “75% of its tax treaties include a time limit for the submission of MAP requests that is less than three years; and
  • almost 40% of its tax treaties do not provide that mutual agreements shall be implemented notwithstanding any time limits in domestic law (which is required under Article 25(2), second sentence), or include the alternative provisions for Article 9(1) and Article 7(2) to set a time limit for making transfer pricing adjustments.” (p. 9 of the Report).

Canada also needs to “clarify its MAP guidance with respect the availability of the MAP in case of audit settlements”. (p. 9 of the Report).

Finally, the Report considers that the “current resources for the MAP function in Canada are […] adequate”.

The average time required to resolve any MAP case is below the 24 months delay at 20.87 months for 2016.

It is noteworthy that the number of outstanding cases at the end of 2016 was 228 in Canada in comparison to 963 cases year-end in the United States whose economy is ten times larger.

In short, Canada has a long-standing habit of creating double taxation issues through its transfer pricing audit practices.

The MAP Peer Review Report for Canada has been added to the library on Transfer Pricing in Canada that is available here.

Robert Robillard, Ph.D., CPA, CGA, Adm.A., MBA, M.Sc. Econ., M.A.P.
Senior Partner, RBRT Fiscalité / Tax (RBRT inc.)

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