Transfer Pricing alert: 11-007Canada’s supreme court grants leave in GlaxoSmithKline |
By Richard Garland, Norma Kraay, Hernan Allik and Nathalie Perron (Canada)
The Supreme Court of Canada on March 24 granted the applications for leave to appeal and for leave to cross-appeal the Federal Court of Appeal (FCA) judgment rendered in the GlaxoSmithKline (GSK) case made respectively by the Minister of National Revenue and by GSK.
By allowing the applications for leave to appeal, the SCC recognizes 1 the importance of the issues involved in the GSK case. The SCC hears only a small number of cases dealing with tax matters, and this will be its first judgment dealing with transfer pricing issues. It is particularly interesting that the SCC has decided to hear a transfer pricing case in which the issues involve the transfer pricing provisions under the now repealed subsection 69(2) of the Income Tax Act, as opposed to the current transfer pricing provisions in section 247
Next steps
The Supreme Court will allow both parties to submit a factum that is a maximum of 40 pages; a hearing date will eventually be set.
While the disposition of the FCA had been to refer the matter back to the Tax Court of Canada, that is unlikely to occur before the SCC has reached its decision.
1Pursuant to subsection 40(1) of the Supreme Court Act, the Supreme Court of Canada grants application for leave to appeal when the court is of the opinion that the issue is of public importance or of such a nature or significance as to warrant decision by it.
Transfer Pricing Alert: 11-007
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