Among other measures, the budget proposes a new transfer pricing adjustment rule and a requirement for taxpayers to analyze cross-border transactions between non-arm’s-length persons based not only on the contractual terms of the transaction or series, but also on other economically relevant characteristics. According to the Department of Finance Canada (Finance), these changes are intended to better align the Canadian transfer pricing rules with international standards and transfer pricing guidance published by the Organisation for Economic Co-operation and Development (OECD Guidelines). The revised transfer pricing rules and documentation requirements will apply to taxation years beginning after November 4, 2025.
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