Will the 2017 OECD Transfer Pricing Guidelines be applied retroactively on the basis that they are just clarifying the previous versions of the transfer pricing guidelines? CRA responded:
The 2017 updates to the Transfer Pricing Guidelines (“TPG”) generally clarified the interpretation and application of the Arm’s Length Principle, largely based on OECD member countries’ experience in applying the previous iterations of the TPG, and do not generally represent a change in the analysis of transfer pricing issues. The CRA does not consider that the TPG are being applied retroactively because content on delineation, risk, intangibles etc. reflects the interpretation and practice of OECD countries, including Canada, before and after the release of the 2017 OECD Transfer Pricing Guidelines.
The CRA has the same view concerning any guidance issued since the 2017 update to the TPG, namely guidance on profit splits, hard-to-value intangibles and attribution of profits to permanent establishments.