In simple terms, when related corporations trade property, services or intangibles across international borders, the outlay is referred to as the transfer price. Pursuant to s. 69(2) of the Federal Income Tax Act, R.S.C. 1985, c. 1 (5th Supp.) (“ITA”), the transfer price must be “reasonable in the circumstances” that would exist if the non-resident [...]

On December 4th, the Tax Court of Canada released its decision in GE Capital v. The Queen 2009 TCC 563, dealing with transfer price deductions. GE Capital was anticipated as a major decision relating to transfer pricing and inter-company financial transactions. Consequently, the court conducted a thorough analysis of the different transfer pricing methodologies and [...]