Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA. Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.
Principal Issues: Updates requested.
Position: See CRA Response.
Author: Carruthers, Lori
IFA 2018 International Tax Conference
Canada Revenue Agency Roundtable
Question 6A - Mutual Agreement Procedure (“MAP”) Program
The Canadian Competent Authority Services Division (“CASD”) has not released a Mutual Agreement Procedure (“MAP”) report since 2014/15. During this time the OECD has released additional guidance on Base Erosion and Profit Shifting issues. With this in mind, are you able to comment on any trends that the CASD has identified in respect to MAP cases over the last few years? Has there been an increase or decrease in the number of MAP cases received by CASD?
The 2016 MAP report has been completed and was recently published on April 13, 2018. The delay was a result of aligning reporting period statistics to the calendar year to match the OECD MAP statistics reporting timeframe. We are pleased to report that in 2016 Canada accepted 124 negotiable MAP cases (within average) and 164 non-negotiable MAP cases (slightly fewer cases than prior years, however, still within the norm). CASD has not noticed major trend changes over the last few years.
Question 6B - Advance Pricing Arrangements (“APAs”)
The latest Advance Pricing Arrangement (“APA”) program report (2016 fiscal year) reflects a 50% reduction in APA applications accepted. We are unsure if this trend has continued into 2017 and 2018, but the CASD appears to be conducting a full review of the issues prior to accepting an APA submission. This appears to be turning away good candidates for the program given the investment in time required, without any guarantee of acceptance. Does CASD intend to stay the course in its approach regarding how it accepts files into the APA program?
We are currently finalizing the 2017 APA report and expect publication soon. We are pleased to report that overall interest in the program remains consistent with prior years. As noted, there was a decrease in APA applications accepted in 2016, however, there was an increase in applications pending. CRA recognizes the importance of tax certainty and while we exercise tremendous effort to ensure that submissions are complete prior to acceptance, we strive to maximize efficiency of the process.
Lori M. Carruthers
May 16, 2018
Response provided by:
Competent Authority Services Division
International, Large Business and Investigations Branch
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