New CBSA Transfer Pricing Policy Creates Opportunities and Obligations for Importers

• Get updates on trade, Customs and regulatory changes
• Stay informed on trade compliance seminars,
  workshops and industry events

x

By John W. Boscariol and Robert A Glasgow, McCarthy Tétrault LLP. Jan 27, 2015

Transfer pricing has been a favorite Canada Border Services Agency (CBSA) enforcement target for some time now. Payments made by importers because of income tax transfer pricing requirements can trigger obligations and liabilities under Canadian customs laws. This arises, for example, when CBSA seeks to assess duties and taxes on upward transfer pricing adjustments and even on the payment of management and administration fees to related parties, claiming that these amounts should be properly accounted for as part of the value for duty of imported goods.

This week, CBSA released Customs Notice 15-001, “Treatment of Downward Price Adjustments in Value for Duty Calculations” (Notice) which, under certain specific circumstances, provides a pathway for importers to the claim a refund of customs duties on goods that have been imported and had their purchase price paid or payable (PPP) subsequently reduced. The new policy in the Notice, however, also makes it clear that in certain circumstances, importers of duty free items are now required to submit to CBSA adjustments reflecting downward price reductions occurring after importation.

Read Full Article on McCarthy Tétrault LLP. »