The Role of Contract Interpretation in Transfer-Pricing Law: Lessons from Canada

Canadian Tax Journal/Revue Fiscale Canadienne (2017) 65:4, 849-92

Deakin Law School Research Paper No. 19-05 (2019)

45 Pages Posted: 18 Sep 2019

See all articles by Amir Pichhadze

Amir Pichhadze

Deakin University, Geelong, Australia - Deakin Law School

Multiple version iconThere are 2 versions of this paper

Date Written: 2017

Abstract

The purpose of this article is to point out recent and significant developments that further support the author’s call to acknowledge the necessary role of contract interpretation in the process of delineating the actual controlled transaction when conducting a transfer-pricing analysis. The first development refers to recent cases in which Canada’s courts (1) have recognized the necessary role of contract interpretation in determining the true nature of a transfer-pricing arrangement, and (2) have exemplified the correct approach to identifying and applying the law of interpretation that governed the contractual terms. These cases ought to serve as an example to other courts, in Canada and around the world, when delineating the true nature of controlled transactions for the purposes of the transfer-pricing analysis. The second development is the explicit recognition by the Organisation for Economic Co-operation and Development, in its newly revised transfer-pricing guidelines, of the necessary role of contract interpretation in the transfer-pricing analysis. Considering these developments, it is hoped and expected that courts will not overlook this necessary task of contract interpretation. The risk of such oversight is exemplified in this article by the Supreme Court of Canada’s analysis in Canada v. GlaxoSmithKline Inc.

Keywords: Taxation, International, Contract Law, Cases, Interpretations, Transfer Pricing

JEL Classification: K12, K22, K33, K34

Suggested Citation

Pichhadze, Amir, The Role of Contract Interpretation in Transfer-Pricing Law: Lessons from Canada (2017). Canadian Tax Journal/Revue Fiscale Canadienne (2017) 65:4, 849-92; Deakin Law School Research Paper No. 19-05 (2019). Available at SSRN: https://ssrn.com/abstract=3454949

Amir Pichhadze (Contact Author)

Deakin University, Geelong, Australia - Deakin Law School ( email )

221 Burwood Highway
Burwood
Burwood, Victoria 3125, Victoria 3125
Australia

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