Does CRA expect that the “reasonable efforts” that a taxpayer must make to determine and use arm’s length transfer prices include the preparation of transfer pricing documentation consistent with the BEPS Action 13 (i.e. Master File and Local File transfer pricing documentation)?
CRA indicated that BEPS Action Item 13 had been dealt with by the introduction of proposed s. 233.8 (respecting country-by-country reporting), which has no direct relation to s. 247 (including the contemporaneous documentation requirement in s. 247(4)) and does not include a requirement to produce a Local File or a Master File. Accordingly, CRA has not altered its criteria regarding whether a taxpayer has made reasonable efforts to determine and use arm’s length transfer pricing.