CRA Sets Record on Closed APA Cases | KPMG | CA
close
Share with your friends

CRA Sets Record on Closed APA Cases

CRA Sets Record on Closed APA Cases

Multinational enterprises may be interested it the CRA’s new 2017 APA Program Report.

1000

Related content

The results from the CRA's new 2017 Advance Pricing Arrangement (APA) Program Report show that it closed a record number of APA cases in calendar year 2017. However, while the CRA closed more cases than it accepted into the program that year, almost an equal number of cases still remained under consideration for acceptance into the program by December 31, 2017.

The report's key findings for the 2017 year are outlined below.

Background
An APA is an arrangement between a multinational enterprise and one or more tax authorities. It provides advance confirmation of the appropriate transfer pricing methodology to apply to specific intercompany transactions for a specified term. APAs have many significant advantages for taxpayers such as:

  • The ability to avoid costly and time-consuming audits 
  • No risk of transfer pricing penalties 
  • Proactive double-tax avoidance 
  • The possibility to "rollback" the APA to prior open taxation years 
  • No need to maintain formal annual transfer pricing documentation.

Highlights of the report
The report says that in 2017, 23 taxpayer applications to the APA program remained pending (i.e., where a pre-file meeting had occurred, but the taxpayer had not yet made an APA submission), 16 new cases were accepted into the program, and three were withdrawn in 2017. An equal number of cases (36) were completed during the year. This is the highest number of completed cases in a 12-month period reported by the CRA in the last seven years of statistics included in the 2017 report (26 cases were closed in 2016).

Despite the increase in case completion for 2017, the average time it took for the CRA to close a bilateral or multilateral APA (i.e., from acceptance to completion) increased slightly to 48.5 months (from 47.3 months). The median time to close these cases also increased to 47.3 months (from 42.7 months).

The report also indicates no changes to the following trends:

  • The majority of APA cases in process involve the transfer of tangible property 
  • The transactional net margin method continues to be the most frequently employed transfer pricing methodology (proposed in 70% of APA cases in progress)
  • APAs involving the United States represented more than half of the APAs in process.

For more information, contact your KPMG adviser.

Information is current to July 24, 2018. The information contained in this publication is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act upon such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's National Tax Centre at 416.777.8500

Connect with us

 

Request for proposal

 

Submit