At times like this, when health and safety are at the forefront of everyone's mind, tax planning, including transfer pricing, understandably, is generally put aside. However, in light of the potential economic downturn arising from the COVID-19 pandemic, it would be prudent for Canadian companies to consider transfer pricing matters at this time.
On April 11, 2020, the legislation implementing the Federal Government's new Canada Emergency Wage Subsidy ("CEWS") was enacted. The CEWS is a $73 billion subsidy intended to support the well-being of workers, maintain employment relationships and reduce claims on the employment insurance regime.
The Fraser Institute recently announced that June 10 is Tax Freedom Day 2018 (although the date varies depending on where you live in Canada). According to the Fraser Institute calculations, from that day onward, employees are finally working for themselves and their families. Moreover, if you had to pay all your taxes up front to different levels of government, you are now in the clear to keep the rest of your earnings until a new year begins.
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