The Queen v. GlaxoSmithKline Inc. to be released tomorrow morning: First transfer pricing case heard by the Supreme Court of Canada


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The Supreme Court of Canada will release its decision in The Queen v. GlaxoSmithKline Inc. (F.C.) (33874) on Thursday, October 18, at 9:45 a.m.

In earlier proceedings, the Tax Court dismissed the taxpayer’s appeal, and the Federal Court of Appeal allowed the taxpayer’s appeal (see our posts on those decisions here and here).

The Crown’s factum may be found here, and GSK Canada’s factum here. Oral arguments were heard by the Supreme Court of Canada in January 2012 (see our post on the arguments here). The decision will be the first for the Supreme Court on the issue of transfer pricing.

The two main questions placed before the Supreme Court were:

  1. Did the Federal Court of Appeal err by applying the reasonable business person test to the interpretation of s. 69(2) of the Act?
  2. Did the Federal Court of Appeal err in interpreting s. 69(2) by failing to apply the arm’s-length principle on a transaction-by-transaction basis and on the basis that members of the multinational group are operating as separate entities?

In a cross-appeal by GSK Canada, the Supreme Court was asked to consider whether the Federal Court of Appeal erred in ordering that the matter be returned to the trial judge for further determination.

We will blog the decision shortly after its release tomorrow.


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