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Canadian Companies Focus On Tax Risk Management

by Mike Godfrey, Tax-News.com, Washington

09 August 2013


Ernst and Young's latest Global Transfer Pricing Survey shows that businesses are taking increasing heed of global headlines on multinationals' tax affairs, with EY finding that, overall, 66 percent considered risk management their most pressing issue, up 32% from the same survey conducted in 2010

Canada appears to be ahead of the international trend. This perhaps comes down to the fact that Canadian respondents were more likely than their global counterparts to have had their transfer pricing policy examined by tax authorities in any country since 2009. All of those questioned on this point answered in the affirmative, compared with just 82 percent worldwide.

More than half of Canadian participants in the survey said that they monitor financial results quarterly, to ensure compliance with transfer pricing policies. A mere 38 percent of their global counterparts claimed to do so.

Commenting on the findings, John Oatway, EY partner and Canadian Transfer Pricing Leader, said: "Companies that get the right transfer pricing and tax policies in place up front stand to win over the long term in this tough and controversial environment. The emphasis we’re now seeing on risk management is reassuring – but it’s only a step in the right direction. Every day, the business world becomes more global and interconnected. Transfer pricing is a major factor in that reality, and planning ahead directly affects the bottom line."

"There’s no question that transfer pricing rules are vast and always evolving. Proactively getting the right processes in place to monitor compliance is the only way to avoid costly double taxation and controversy that can take a company off course," Oatway added.

TAGS: compliance | Transfer Pricing | tax | business | tax compliance | revenue guidance | multinationals | tax planning | transfer pricing | Canada | revenue statistics

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