CRA Transfer Pricing Audit — Montreal CPA Firm Near You: OECD-Aligned Defense Files

A CRA Transfer Pricing Audit is a specialized review focused on transactions between related companies — especially across borders — to ensure that prices are set at arm’s length. These audits apply to intercompany sales, services, loans, and royalties, and can result in major reassessments if documentation is weak or inconsistent.
Mackisen CPA Montreal prepares OECD-aligned defense files that meet all Canadian and international transfer-pricing requirements — ensuring your cross-border pricing withstands CRA scrutiny while minimizing risk and penalties.

Legal Foundation

Law: Income Tax Act s.247 (Transfer Pricing Rules) — requires that related-party transactions reflect fair-market value (arm’s-length principle).
Jurisprudence: GlaxoSmithKline Inc. v. Canada (2012 SCC) — CRA must consider commercial reality and not rely solely on the price itself when evaluating arm’s-length compliance.

Learning insight: CRA doesn’t question the existence of the transaction — it questions the price. Mackisen CPA ensures your price reflects both fairness and purpose.

Why CRA Targets Transfer Pricing

CRA’s Transfer Pricing Review Division identifies companies that may be shifting profits or deducting excessive management or royalty fees.
Common triggers include:

• Management or service fees charged between subsidiaries.

• Cross-border loans with non-market interest rates.

• Royalties or licensing agreements with foreign affiliates.

• Consistent losses in Canadian entities offset by profits abroad.

• Missing or outdated transfer-pricing documentation (T106 filings).

Learning insight: CRA audits cross-border pricing where profits travel faster than paperwork. Mackisen CPA ensures both move together, compliantly.

CRA’s Transfer Pricing Audit Process

1. Risk Assessment: CRA analyzes T106 forms and compares intercompany pricing to benchmarks.

2. Information Request: CRA demands contemporaneous documentation under s.247(4).

3. Functional Analysis: CRA examines who performs which functions, assumes which risks, and uses which assets.

4. Comparability Study: CRA tests pricing against arm’s-length market transactions.

5. Proposed Adjustment: CRA recalculates taxable income if pricing diverges from fair-market value.

Learning insight: CRA’s audit isn’t about opinion — it’s about evidence. Mackisen CPA builds the evidence that proves compliance.

Mackisen CPA’s Transfer Pricing Defense Framework

1. Functional & Risk Analysis: Identify the real economic roles of each entity (producer, distributor, financier).

2. OECD-Compliant Documentation: Prepare Master File and Local File according to international BEPS standards.

3. Comparable Benchmarking: Use reliable databases to determine arm’s-length price ranges.

4. Economic Study: Apply accepted pricing models — CUP, TNMM, Cost-Plus, or Resale Price Method.

5. Audit Representation: Communicate and negotiate with CRA’s Transfer Pricing Division to prevent penalties.

Learning insight: Transfer pricing isn’t a calculation — it’s a justification. Mackisen CPA provides the narrative and data to justify every number.

Common CRA Adjustments

• Overstated management or service fees.

• Cross-border loans deemed interest-free or excessive.

• Intragroup royalties without measurable IP value.

• Double taxation when foreign affiliates use conflicting valuations.

• Missing contemporaneous documentation triggering 10% penalties under s.247(3).

Mackisen CPA ensures all documentation is contemporaneous, economically justified, and aligned with both OECD and CRA standards.

Learning insight: CRA applies penalties when records are missing — Mackisen CPA prevents penalties by making records irrefutable.

Real-World Success Cases

• A Québec manufacturer avoided a $1.9M reassessment after Mackisen CPA proved that its U.S. management-fee structure met OECD benchmarks.

• A technology group reduced CRA’s proposed adjustment by 90% after our CPAs provided a detailed TNMM economic analysis.

• A pharmaceutical company cleared all penalties when Mackisen CPA demonstrated that royalties corresponded to real intellectual property value.

Learning insight: CRA’s auditors respect one thing — proof backed by principle. Mackisen CPA delivers both.

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Learning insight: SEO and tax defense both demand structure, consistency, and credibility. Mackisen CPA achieves all three.

Why Mackisen CPA Montreal

Mackisen CPA Montreal brings over 35 years of combined expertise in corporate taxation, transfer-pricing documentation, and CRA audit defense. Our bilingual CPAs and economists create OECD-standard defense files that align your pricing model with global tax rules.
We protect your compliance, credibility, and international operations — one report at a time.

Learning insight: CRA audits your numbers — Mackisen CPA audits your reasoning. Together, they form an unbreakable defense.

Call to Action

If CRA or Revenu Québec has requested your transfer-pricing documentation or issued a T106-related inquiry, act before penalties apply.
Contact Mackisen CPA Montreal for an OECD-compliant transfer-pricing defense and audit strategy.
Phone: 514-276-0808 | Email: info@mackisen.com | Website: mackisen.com

Learning conclusion: CRA Transfer Pricing Audits test fairness, not formality. Mackisen CPA Montreal ensures your pricing is arm’s-length, your documentation airtight, and your global operations audit-proof.