Canada: Mutual agreement procedure (MAP) statistics for 2021

A report of the mutual agreement procedure (MAP) program for 2021 highlights that the Canada Revenue Agency (CRA) closed more MAP cases in 2021 compared to 2020 but took more time to complete each case on average (over 20 months).

The report shows that most negotiable MAP cases involve taxpayers from the United States (i.e., in over 39% of cases), although the CRA is engaged in cases involving taxpayers from 30 different jurisdictions.

• 167 negotiable MAP cases as of 1 January 2021
• 109 new MAP cases accepted during the year
• 81 MAP cases closed in 2021 (up from 74 in 2020)
• Time to complete—an average of 23.3 months to complete a negotiable MAP case in 2021 (up from 17.8 months in 2020)
  • Time to complete Canadian-initiated cases in 2021—20.3 months (down from just over 25 months in 2020)
  • Time to complete foreign-initiated cases in 2021—34.7 months (up significantly from just over 11 months in 2020)
  • The CRA targeted completion times of 24 months for both foreign and Canadian initiated adjustments.

• Taxpayer in 36 out of the 81 cases closed in 2021 (44.5%) received full relief from double taxation.
• In 11 cases (13.6%), the taxpayer received unilateral relief.
• In 10 cases (12.3%), the case was resolved domestically.
• In the remaining 24 cases (29.6%), the taxpayer either received partial relief, withdrew the case, had objections not justified, resulted in no agreement, or were denied MAP access, among other outcomes.

• At year-end, 68% of negotiable cases were transfer pricing cases.
• The CRA's inventory of transfer pricing cases increased slightly in 2021 to 132 (from 129).
• The CRA accepted 57 new cases and completed 54 cases in 2021. The average time to complete these transfer pricing cases were over 20.6 months for those started post-2015 and over 84.8 months for those started pre-2016.
• The CRA's non-negotiable MAP cases (where the foreign tax authority is not involved) increased significantly to 656 cases in 2021 (from 318 in 2020), largely because the CRA stated it would accept retroactive elections for certain pensions in Income Tax Folio S5-F3-C1, “Taxation of a Roth IRA”, which was published on January 9, 2021.

The MAP program is designed to help taxpayers resolve cases of double taxation, or taxation that does not agree with a tax treaty.

The MAP procedure is included in Canada's bilateral tax conventions. Under these tax treaty provisions, residents of either country can ask for help in resolving an issue covered by the treaty. In Canada, authority for resolving tax disputes is delegated to senior CRA officials known as the “Competent Authority.”

The Organisation for Economic Co-operation and Development (OECD) also publishes MAP statistics on an annual basis and further breaks the MAP caseload down by each jurisdiction, including Canada.

The CRA also has an advance pricing agreement (APA) program, which is different from the MAP program. The APA program provides taxpayers with advance confirmation of the appropriate transfer pricing methodology to apply to specific intercompany transactions for a specified term and offers certain advantages to taxpayers.

Read a June 2023 report prepared by the KPMG member firm in Canada