Canada's Transfer Pricing Test in the Aftermath of GlaxoSmithKline Inc.: A Critique of the Reasonable Business Person Test
University of Michigan Law School
May 15, 2013
International Transfer Pricing Journal, 2013 (Volume 20), No. 3
GlaxoSmithKline Inc. v. The Queen is a seminal Canadian transfer pricing case. On final appeal to the Supreme Court of Canada, the Minister of National Revenue asked the Court to determine whether the Court of Appeal erred in applying the reasonable business person test. The author critically analyses the Supreme Court’s handling of the Minister’s question and concludes that the Supreme Court erred in affirming the test of the Court of Appeal. Moreover, the Supreme Court infused further uncertainty as to which test applies by seeming to have acknowledged the relevance of both an empirical arm’s length test and a reasonable business person test.
Keywords: Transfer pricing, Arm’s Length Standard, Arm’s Length Principle, Reasonable Business Person, GlaxoSmithKline, Canada, OECD, Tax, International Tax, Tax Court of Canada, Federal Court of Appeal, Supreme Court of Canada
JEL Classification: H20, H25, H26, H29, K33, K34
Date posted: July 30, 2013 ; Last revised: August 12, 2016
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