- TeleTech Canada, Inc. v. Minister of National Revenue - Transfer Pricing Dispute Resolution Gone Wrong
- October 23, 2013 | Author: Melissa Wright
- Law Firm: Cassels Brock & Blackwell LLP - Toronto Office
The recent decision of the Federal Court in TeleTech Canada, Inc. v. Minister of National Revenue ("TeleTech")1 is a reminder to all taxpayers dealing with transfer pricing adjustments of the strict procedural requirements for initiating a request for competent authority relief under the Canada-U.S. Tax Convention (the "Treaty"), and of the domestic remedies that may be available to facilitate the process.
Article IX of the Treaty and the Mutual Agreement Procedure ("MAP") under Article XXVI of the Treaty provide relief to taxpayers where the actions of one or both governments have resulted in taxation not in accordance with the Treaty. These provisions allow the competent authorities of Canada or the U.S. to make corresponding adjustments, resolve Treaty-based disputes or, where applicable, submit matters to binding arbitration. These Treaty-based and domestic procedures must be carefully and diligently pursued.
TeleTech illustrates the discretion of the Canada Revenue Agency (the "CRA") to deny a request for competent authority assistance. In TeleTech the Federal Court also considered the potential availability of the extraordinary remedy of mandamus to compel the CRA to accept a taxpayer's request for competent authority assistance. This aspect of the case is the subject of a recent article, previously published on the Ontario Bar Association’s website along with the above summary.
1 2013 FC 572