Finance recently released draft legislation that proposes new regulations to allow simplified transfer pricing documentation for small taxpayers and partnerships, and for a set of qualifying transactions including small transfers of tangible property, small intra-group services transactions and certain loans, subject to specific revenue and transaction thresholds, among other measures. The simplified documentation requirements are intended to provide a reduced compliance alternative to the full Canadian transfer pricing contemporaneous documentation requirements for certain low-risk taxpayers and transactions to avoid a transfer pricing penalty. The draft proposals also introduce an anti-avoidance rule related to the simplified transfer pricing documentation regime.
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