The Tax Court of Canada, on August 27, ruled in favor of Candian company AgraCity Ltd. and related company, Saskatchewan Ltd., in a dispute with the Canadian Revenue Agency over the taxation of profits from the sale of herbicide conducted through a Barbados subsidiary.
To support its position, the Canadian Revenue Agency attempted to use transfer pricing recharacterization provisions, conventional transfer pricing laws requiring arm’s length dealings between related companies, and the laws disregarding sham transactions.
MNE Tax expects to publish an in-depth review of the two cases, AgraCity Ltd. v. Her Majesty the Queen and Saskatchewan Ltd. v. Her Majesty the Queen, later this week.
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