The Canada Revenue Agency (CRA) has released its Mutual Agreement Procedure (MAP) Program report for the period from April 1, 2013 to March 31, 2014, disclosing that it completed 2,923 MAP cases, 105 of which were categorized as “negotiable,” meaning that that bilateral negotiations with another tax administration were required to resolve the case. Completed negotiable cases were in-line with prior years’ output.
Of the 105 negotiable cases, all but two cases resulted in full relief from double taxation. Ending inventory stood at 344 cases, 257 of which were negotiable.
The CRA closed Canadian-initiated negotiable cases more quickly in 2013–2014 than in prior years, averaging 22.63 months to resolve these cases. The previous fiscal year, time to complete averaged 26.13 months.
Average time to complete foreign-initiated negotiable cases was longer, and increased over prior periods, though, rising to 30.90 months during 2013–2014. Time to complete foreign initiated cases was 21.93 months during the previous fiscal year. Of the resolved cases, 92 were Canadian-initiated, while only 13 were foreign initiated.
The CRA completed 12 negotiable cases involving the computer and electronics industry – the most for any industry. The transactional net margin method using operating margin to measure profit was the most frequently used transfer pricing methodology, applied in 32 cases. MAP report
