6 worked Transfer Pricing Functional Analysis 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 functional analysis work, not a specific client's file.
Case Study 1 · Missed incentive claimed
$47,000 In Credits Claimed That Prior Filings Had Missed — Canadian on US Payroll, Mississauga
Client: A Canadian with a US employer · Where: Mississauga, Ontario · Engagement: 7 weeks, fixed fee
Credits claimed$47,000
Years adjusted4
Review outcomeNo adjustment
The situation — A Canadian with a US employer, Mississauga, Ontario
A Canadian with a US employer in Mississauga, Ontario had been filing for 4 years without ever claiming the incentives its activity qualified for. Behind that sat invoices paid to a non-resident consultant working on site in Canada with no Regulation 105 withholding taken.
What we did for A Canadian with a US employer, Mississauga, Ontario
We tested each activity against the eligibility criteria rather than the description on the invoice, then restructured the US holding so the Canadian and US characterisations aligned, ending the double taxation going forward.
The result — A Canadian with a US employer, Mississauga, Ontario
$47,000 in credits claimed, with the open prior years adjusted as well. The claim passed review without adjustment.
Case Study 2 · Scaling without breaking
Second-Province Expansion Handled, $77,000 Of Cash Released — Florida Property Owner, Brampton
Client: A family with a Florida vacation property · Where: Brampton, Ontario · Engagement: 5 weeks, fixed fee
Cash released$77,000
New registrationsComplete on day one
Compliance gapsNone
The situation — A family with a Florida vacation property, Brampton, Ontario
Revenue at a family with a Florida vacation property in Brampton, Ontario was up sharply and cash was tighter than ever. Underneath it sat winters spent in the United States with the day count kept casually and no residency position documented anywhere.
What we did for A family with a Florida vacation property, Brampton, Ontario
We filed the section 216 election with the supporting rental statements and recovered the excess withholding as a refund. Every new obligation — registration, remittance frequency, provincial filing — was set up before it was triggered, not after.
The result — A family with a Florida vacation property, Brampton, Ontario
$77,000 of cash was released from the working capital cycle, and the expansion completed with every registration and filing obligation covered from day one.
Case Study 3 · Objection and relief
Notice Of Objection Allowed In Full, $11,500 Reversed — Arizona Snowbird, Lethbridge
Client: A snowbird spending winters in Arizona · Where: Lethbridge, Alberta · Engagement: 8 weeks, fixed fee
Amount reversed$11,500
ObjectionAllowed in full
Account balanceNil
The situation — A snowbird spending winters in Arizona, Lethbridge, Alberta
A snowbird spending winters in Arizona in Lethbridge, Alberta had been reassessed for $11,500 and had 20 days left on the objection deadline. The reassessment rested on invoices paid to a non-resident consultant working on site in Canada with no Regulation 105 withholding taken.
What we did for A snowbird spending winters in Arizona, Lethbridge, Alberta
We filed the objection inside the deadline with a complete submission rather than a placeholder, and reported the deemed disposition properly on the departure return and claimed the foreign tax credits that had been left unused.
The result — A snowbird spending winters in Arizona, Lethbridge, Alberta
The appeals officer allowed the objection in full. $11,500 was reversed and the account returned to a nil balance.
Case Study 4 · Backlog brought current
7 Years Filed, $77,000 Removed From The Assessed Balance — Inbound Assignee, Halifax
Client: An inbound transferee on assignment · Where: Halifax, Nova Scotia · Engagement: 7 weeks, fixed fee
Years filed7
Assessed balance removed$77,000
CollectionsStopped
The situation — An inbound transferee on assignment, Halifax, Nova Scotia
An inbound transferee on assignment in Halifax, Nova Scotia had not filed for 7 years. The CRA had issued arbitrary assessments, and the business was carrying a departure year filed as a normal resident return with no deemed disposition reported on top of a growing interest balance.
What we did for An inbound transferee on assignment, Halifax, Nova Scotia
We started with the oldest year and worked forward so each year's closing balances fed the next. We registered the payer for a non-resident withholding account, remitted the Regulation 105 amounts due, and applied for waivers covering the rest of the contract, filing the years in sequence rather than all at once.
The result — An inbound transferee on assignment, Halifax, Nova Scotia
Every year is now filed and assessed on actual figures. The notional assessments were vacated and $77,000 of the estimated balance came off, with a payment arrangement covering the rest.
Client: A Canadian resident receiving US pension income · Where: Moncton, New Brunswick · Engagement: 3 weeks, fixed fee
Annual saving$51,000
ReorganisationTax-neutral
StructureMatches operations
The situation — A Canadian resident receiving US pension income, Moncton, New Brunswick
A Canadian resident receiving US pension income in Moncton, New Brunswick was carrying 25% withholding on gross Canadian rent where a section 216 election would have taxed only the net, and every option for fixing it ran through a reorganisation that had to be done without triggering tax.
What we did for A Canadian resident receiving US pension income, Moncton, New Brunswick
Working with the client's lawyer, we applied the treaty rate to the dividend withholding, filed the NR4 return, and remitted the shortfall before the CRA assessed the payer for it and prepared the elections, resolutions and valuations the structure needed to stand up.
The result — A Canadian resident receiving US pension income, Moncton, New Brunswick
The structure now matches the business. Annual saving of $51,000, and the reorganisation itself was tax-neutral.
Client: A non-resident owning Canadian rental property · Where: Ottawa, Ontario · Engagement: 3 weeks, fixed fee
Amount recovered$31,000
Reporting statusCurrent
Annual effortHours, not weeks
The situation — A non-resident owning Canadian rental property, Ottawa, Ontario
Foreign holdings at a non-resident owning Canadian rental property in Ottawa, Ontario had passed the reporting threshold without anyone noticing. Behind the disclosure problem sat foreign accounts that had passed the $100,000 T1135 threshold three years earlier.
What we did for A non-resident owning Canadian rental property, Ottawa, Ontario
We reconstructed the day count on both sides of the border and documented the residency and treaty position before either revenue authority asked, claiming the treaty relief and foreign tax credits on the Canadian return and correcting the disclosure position for the open years.
The result — A non-resident owning Canadian rental property, Ottawa, Ontario
The treaty position was accepted and $31,000 was recovered. Reporting is now current and the annual process takes hours rather than weeks.
Reviewed for the 2025 tax year by Udit Gupta, Founder and Tax Accountant. 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.
