|
''Canada v GlaxoSmithKline Inc'' is the first ruling of the Supreme Court of Canada that deals with issues involving transfer pricing and how they are treated under the ''Income Tax Act'' of Canada ("ITA"). ==Background== In 1976, a predecessor of GlaxoSmithKline ("GSK") discovered the drug ranitidine, which was approved for sale in Canada in 1981 and marketed as Zantac. Ranitidine's primary manufacture was conducted by related companies located in the United Kingdom and Singapore, and it was subsequently sold to Adechsa SA, another related company located in Switzerland, for further sale to other group companies and unrelated distributors at prices dictated by the parent company.〔Appellant's factum at SCC, par. 911〕 In addition, the following intercompany agreements were entered into by Glaxo Canada: : * in 1972, a Consultancy Agreement with Glaxo Group Limited covering services and intangibles provided to Glaxo Canada in exchange for a 5% royalty〔Appellant's factum at SCC, par. 8〕 : * in 1983, a Supply Agreement with Adechsa for the purchase of ranitidine〔Appellant's factum at SCC, par. 12〕 : * an amendment to the 1972 agreement, to cover services and intangibles relating to Zantac〔Appellant's factum at SCC, par. 14〕 : * in 1988, a Licence Agreement with Glaxo Group Limited that replaced the 1972 agreement, and which covered various services and intangibles, in exchange for a 6% royalty on the net sales of drugs〔Appellant's factum at SCC, par. 15〕 During its taxation years from 1990 to 1993, Glaxo deducted and remitted withholding tax with respect to royalty payments it made to Glaxo Group Limited under the 1988 agreement, but not with respect to payments to Adechsa under the 1983 agreement, which were considered fully deductible as cost of goods sold.〔Appellant's factum at SCC, par. 17〕 By 1990, generic drug manufacturers such as Apotex and Novopharm were able to acquire ranitidine on the open market at prices significantly less than Glaxo Canada was paying under its 1983 agreement.〔Appellant's factum at SCC, par. 19〕 The Minister of National Revenue subsequently reassessed Glaxo Canada's 19901993 taxation years under: : * s. 69(2),〔replaced in 1998 by the current (ITA s. 247(2)(a) and (c) )〕 which applied where a taxpayer is not dealing at arm's length with a non-resident and pays an amount greater than the amount "that would have been reasonable in the circumstances if the non-resident person and the taxpayer had been dealing at arm's length". In such a case, the transfer price is deemed to be the reasonable amount determined on an arm's length basis.〔Appellant's factum at SCC, par. 20〕 : * s. 56(2),〔(ITA s. 56(2) )〕 which resulted in a deemed dividend to Adechsa, and its assessment for withholding tax under Part XIII of the ''ITA''. Glaxo Canada subsequently appealed the reassessments to the Tax Court of Canada. 抄文引用元・出典: フリー百科事典『 ウィキペディア（Wikipedia）』 ■ウィキペディアで「Canada v GlaxoSmithKline Inc」の詳細全文を読む スポンサード リンク
|