GlaxoSmithKline case: Legal form and economic relevance prevail

The Supreme Court of Canada (SCC) has sent a clear signal that the transfer pricing policy established for each related party transaction matters and the transfer prices in the case of multiple transactions, such as the licence of a trademark and the supply of both goods and services, will be carefu...

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Bibliographic Details
Published in:International tax review 2013-04
Format: Magazinearticle
Language:English
Subjects:
Agreements
Generic drugs
Manufacturers
Marketing
Pharmaceutical industry
Pricing policies
Purchasing
Related party transactions
Royalties
State court decisions
Suppliers
Supreme Court decisions
Transfer pricing
Trials
Withholding taxes
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Summary:The Supreme Court of Canada (SCC) has sent a clear signal that the transfer pricing policy established for each related party transaction matters and the transfer prices in the case of multiple transactions, such as the licence of a trademark and the supply of both goods and services, will be carefully scrutinised. The SCC's judgment in The Queen v. GlaxoSmithKline Inc. (Glaxo) is the court's first pronouncement on Canada's transfer pricing rules. The court acknowledged that transfer pricing is not an exact science, necessitating some leeway in the determination so that as long as a transfer price is within what a court determines is a reasonable range, the requirements of the transfer pricing provisions] should be satisfied.
ISSN:0958-7594