Canadian Tax Ruling Signals Cross-Border Structure Security

Law360 (October 26, 2020, 2:09 PM EDT) -- On Aug. 27 in AgraCity Ltd. v. The Queen, the Tax Court of Canada ruled in favor of AgraCity, finding that its transactions with a Barbados subsidiary had been on arm's-length terms with no adjustments to income or tax required.

The Crown's key arguments against AgraCity were similar to those from the recent transfer pricing case involving Cameco Corp. and this second loss in Tax Court may lead to more scrutiny as to whether Canada's tax laws require revision for greater consistency with the Organization for Economic Cooperation and Development's recent base erosion and profit shifting recommendations.

Similar to the Cameco...

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