All material subject to strictly enforced copyright laws. © 2022 ITR is part of the Euromoney Institutional Investor PLC group.

Canada: CbCR rules implemented in Canada


Dan Jankovic

Consistent with the recommendations of Article 13 of the BEPS Project, Canada passed, on December 15 2016, legislation implementing country-by-country reporting (CbCR).

Canada is a signatory to the Multilateral Competent Authority Agreement on the Automatic Exchange of Country-by-Country Reports, facilitating implementation of the transfer pricing reporting standards developed under Action 13 of the OECD's BEPS Project.

The Canadian legislation provides that a CbC report will generally be required to be completed in the prescribed manner with the Canada Revenue Agency (CRA) by:

  • The ultimate parent entity of the multinational enterprise group (MNE group) if it is resident in Canada in the reporting fiscal year; and

  • A Canadian-resident constituent entity of an MNE group that is not the ultimate parent entity of the MNE group if one of the following conditions is satisfied:

a) the ultimate parent entity of the MNE group is not obligated to file a CbC report in its jurisdiction of tax residence;

b) the jurisdiction of tax residence of the ultimate parent entity of the MNE group does not have a qualifying competent authority agreement (relating to the automatic exchange of CbC reports) in effect to which Canada is a party; or

c) there has been a "systemic failure" of the jurisdiction of tax residence of the ultimate parent entity and the CRA has notified the constituent entity of the systemic failure.

A jurisdiction will generally be in a position of "systemic failure" if it has a qualifying competent authority agreement in effect with Canada but it has suspended automatic exchange or it has persistently failed to automatically provide CbC reports in its possession (in respect of MNE groups that have constituent entities in Canada) to Canada.

The MNE group is defined in the legislation and contains three elements. The first element sets out the conditions for two or more entities to form a group based on requirements to prepare consolidated financial statements. The second element sets out the requirement that the group is a multinational by virtue of it having business entities operating in more than one jurisdiction. Finally, the third element provides an exclusion from the definition for "excluded MNE groups", which are groups that had consolidated group revenue of less than €750 million ($797.3 million) during the immediately preceding fiscal year. An MNE group will be exempt from Canadian CbCR obligations for a reporting fiscal year in which it qualifies as an excluded MNE group.

The legislation generally provides that a CbC report in respect of a reporting fiscal year of an MNE group must be filed within 12 months after the last day of the reporting fiscal year, and it applies to reporting fiscal years of MNE groups that begin on or after January 1 2016. The prescribed form for CbC reports has not been published yet, but generally is expected to be based on the template form released by the OECD.

Dan Jankovic (, Calgary

Blake Cassels & Graydon

Tel: +1 403 260 9725


more across site & bottom lb ros

More from across our site

Peter Boerhof, the VAT director of Vertex, will take part in a fireside chat with ITR at 10am GMT on November 10 to discuss how to manage the tax complexities of cross-border sales.
Tax leaders are concerned that the EU digitalisation drive could mean more audits as tax authorities collect ever greater amounts of data from businesses.
Speakers at ITR’s Global TP Forum Europe said TP analyses are often tied to the value created from a company’s ESG commitments.
Discussions around recharacterisation are better to avoid, as tax authorities could dismiss an entire TP transaction, said panellists at ITR’s Global TP Forum.
Several tax chiefs shared their administrations’ latest digital identity tracking systems and other tax technologies at the OECD’s annual meeting of authorities.
Businesses welcome the UK’s decision to scrap the IR35 reforms but are not happy about the time and money they have wasted to date.
Energy ministers agreed on regulations including a windfall tax on fossil fuel companies to address high gas prices at an extraordinary Council meeting on September 30.
The European Parliament raises concerns over unanimity in voting on pillar two, while protests break out over tax reform in Colombia.
Ramesh Khaitan speaks to reporter Siqalane Taho about tax morality, transfer pricing regulations, Indian tax developments, and the OECD’s two-pillar solution.
Join ITR and KPMG China at 10am BST on October 19 as they discuss the personal, employment, and corporate tax-related implications of employees working from overseas.
We use cookies to provide a personalized site experience.

By continuing to use & browse the site you agree to our Privacy Policy.
I agree