CRA considers that the s. 247(2) rules apply to transfer pricing between a controlled foreign affiliate and non-resident non-arm’s length persons where such transactions affect the computation of the CFA’s foreign accrual property income. However, CRA generally will not apply s. 247 to such a transaction where
- the pricing is reviewed by the tax authority of the country in which the foreign affiliate is resident;
- the pricing is determined to be in accordance with the transfer pricing legislation or guidelines of that country; and
- that legislation (and guidelines) adopt the arm’s-length principle.