6 worked Transfer Pricing Audit Defence case studies — the position a client typically comes to us with, what we do, and what it is worth. Each is an illustrative example built on the rules that apply to transfer pricing audit defence work, not a specific client's file.
Case Study 1 · Missed incentive claimed
$78,000 In Credits Claimed That Prior Filings Had Missed — Taxpayer Relief Applicant, Mississauga
Client: A taxpayer applying for relief from penalties and interest · Where: Mississauga, Ontario · Engagement: 11 weeks, fixed fee
Credits claimed$78,000
Years adjusted5
Review outcomeNo adjustment
The situation — A taxpayer applying for relief from penalties and interest, Mississauga, Ontario
A taxpayer applying for relief from penalties and interest in Mississauga, Ontario had been filing for 5 years. In that time, the incentives its activity qualified for were never claimed. Behind that sat a waiver signed at the counter that kept an otherwise closed year open with no end date.
What we did for A taxpayer applying for relief from penalties and interest, Mississauga, Ontario
We tested each activity against the eligibility criteria rather than the description on the invoice. Then we brought every outstanding return current, then negotiated a payment arrangement that stopped the collections action.
The result — A taxpayer applying for relief from penalties and interest, Mississauga, Ontario
$78,000 in credits claimed, with the open prior years adjusted as well. The claim passed review without adjustment.
Case Study 2 · CRA review defended
$79,000 Proposed Adjustment Withdrawn In Full — Late-Objection Taxpayer, Brampton
Client: A taxpayer whose objection window has closed · Where: Brampton, Ontario · Engagement: 7 weeks, fixed fee
Adjustment withdrawn$79,000
File closed in7 weeks
Penalties assessedNone
The situation — A taxpayer whose objection window has closed, Brampton, Ontario
A taxpayer whose objection window has closed in Brampton, Ontario received a proposal letter opening a review of transfer pricing audit defence. The CRA had identified an audit conducted over the phone, with nothing on file showing what had been provided or when. It proposed an adjustment of $79,000, with 30 days to respond.
What we did for A taxpayer whose objection window has closed, Brampton, Ontario
We treated the response as an evidence exercise rather than an argument. We assembled the contemporaneous records, filed a structured response to each proposed adjustment with the supporting documents indexed, and had the proposal withdrawn. We then indexed every supporting document against the specific line the auditor had questioned.
The result — A taxpayer whose objection window has closed, Brampton, Ontario
The proposed adjustment was withdrawn in full — all $79,000 of it. The file closed in 7 weeks with no change to the assessed amounts and no penalty.
Case Study 3 · Scaling without breaking
Scaled To 20 Staff With $113,000 Of Working Capital Freed — Taxpayer Facing Collections, Lethbridge
Client: A taxpayer with frozen bank accounts · Where: Lethbridge, Alberta · Engagement: 4 weeks, fixed fee
Headcount reached20
Working capital freed$113,000
Missed deadlinesZero
The situation — A taxpayer with frozen bank accounts, Lethbridge, Alberta
A taxpayer with frozen bank accounts in Lethbridge, Alberta was growing fast, with headcount reaching 20 in eighteen months. The back office had not kept up. A director liability assessment for a corporation that had already stopped operating was the first thing to break.
What we did for A taxpayer with frozen bank accounts, Lethbridge, Alberta
We requested the auditor’s working papers and report to see how the assessment had been built before answering any of it. We built the compliance calendar for the size the business was becoming rather than the size it had been.
The result — A taxpayer with frozen bank accounts, Lethbridge, Alberta
The business reached 20 staff with no missed remittance and no late filing. $113,000 of working capital was freed in the process.
Case Study 4 · Planning that cut the bill
Remuneration Review Saved $41,000 Across Corporate And Personal Returns — Director Facing Assessment, Halifax
Client: A business owner with a director liability assessment · Where: Halifax, Nova Scotia · Engagement: 8 weeks, fixed fee
Combined saving$41,000
ScopeCorporate + personal
Future yearsNo rework needed
The situation — A business owner with a director liability assessment, Halifax, Nova Scotia
Nothing was wrong at a business owner with a director liability assessment in Halifax, Nova Scotia. The filings were on time and accurate. What they were not was planned. A proposal letter with a 30-day response window and no supporting records assembled had never been reviewed.
What we did for A business owner with a director liability assessment, Halifax, Nova Scotia
We filed the Tax Court appeal inside the window and resolved the remaining adjustments before a hearing date was needed. We ran the numbers across both the corporate and personal returns, so the saving was real rather than deferred into someone else's hands.
The result — A business owner with a director liability assessment, Halifax, Nova Scotia
$41,000 came off the combined corporate and personal tax bill, and the structure holds for future years without further work.
Client: A contractor facing a proposed reassessment · Where: Moncton, New Brunswick · Engagement: 11 weeks, fixed fee
Overpayment refunded$144,000
Late remittances sinceZero
ScheduleAutomated
The situation — A contractor facing a proposed reassessment, Moncton, New Brunswick
Remittances at a contractor facing a proposed reassessment in Moncton, New Brunswick were consistently late by a few days. That was enough to trigger penalties every quarter. Behind it sat a waiver signed at the counter that kept an otherwise closed year open with no end date.
What we did for A contractor facing a proposed reassessment, Moncton, New Brunswick
We kept the waiver narrowed to the issue actually under review and let the remaining years close on the normal reassessment period. Then we moved the remittance dates into a scheduled process rather than a monthly decision.
The result — A contractor facing a proposed reassessment, Moncton, New Brunswick
Penalties stopped from the following remittance onwards, and $144,000 of overpaid instalments was refunded.
Case Study 6 · Records and systems rebuilt
Month-End Close Cut From 11 Weeks To 4 Days — Assessed Shareholder, Ottawa
Client: A shareholder assessed on a taxable benefit · Where: Ottawa, Ontario · Engagement: 6 weeks, fixed fee
Close time before11 weeks
Close time after4 days
Year-endReview, not rebuild
The situation — A shareholder assessed on a taxable benefit, Ottawa, Ontario
The accounting file at a shareholder assessed on a taxable benefit in Ottawa, Ontario had a weak foundation. It was built on a net-worth assessment built on unexplained deposits that were actually loan proceeds. The year-end had taken 11 weeks each of the last three years.
What we did for A shareholder assessed on a taxable benefit, Ottawa, Ontario
We answered each query in writing with an indexed document package, so the file showed exactly what the auditor had received and on what date. We also moved the reconciliations into the monthly cycle, so the year-end stopped being a rebuild.
The result — A shareholder assessed on a taxable benefit, Ottawa, Ontario
The file reconciles. Month-end closes in 4 days instead of 11 weeks, and the year-end is a review rather than a reconstruction.
Reviewed by Udit Gupta, Founder and Tax Accountant for the 2025 tax year. These case studies are illustrative worked examples composed from the CRA rules that apply to this type of work, not specific client files; figures are representative and outcomes depend on your own facts.
