APPEAL NO. 2008-714(IT)G

Between Alberta Printed Circuits Ltd., the Appellant,
and Her Majesty the Queen, the Respondent, before the Honourable Justice F.J. Pizzitelli, in February 2011.  

BACKGROUND 

In brief, Alberta Printed Circuits Ltd. operates in Canada, manufacturing prototype quantities of circuit boards.

In 1997, Alberta Printed Circuits Ltd. outsourced part of its

manufacturing process - the set-up of each circuit board - to
APCI Inc., a newly formed company operated in Barbados.

The taxpayer appealed the reassessments by the Canada
Revenue Agency for the 1999, 2000 and 2001 taxation years pursuant to paragraph 247(2)(a) of the Income Tax Act. 

SUMMARY

The amounts paid to APCI Inc. consisted of two parts: the  

largest portion - 78% - for the set-up of each circuit board; and, the lesser portion - 22% - for other services.

In paragraph 212, his Honour concluded "... the Appellant
has satisfied me, using the internal CUP method tested by the
external CUP method, that the prices it paid for set-up
services were consistent with prices charged for set-up
services between arm's length parties ..."

In paragraph 246, his Honour decided "... the appeal with
respect to the transfer pricing adjustments is allowed ..." and referred the matter back to the Minister of National Revenue along with an adjustment to the price for other services.

REASONS FOR JUDGEMENT

Learn more by reading the Reasons for Judgement, which is posted on the Tax Court of Canada's website.  Click here.