For years, Canadian subsidiaries of fintech and digital asset groups had three months to hand the Canada Revenue Agency (CRA) their transfer pricing documentation after a request. That cushion is gone. Under Bill C-15, which received royal assent on March 26, 2026, the window is now 30 days — and missing it can cost you the only defence against a transfer pricing penalty.

If your Canadian entity bills a cost-plus fee to a parent in Singapore, Hong Kong or the US, borrows from a group treasury company, or pays a royalty for the platform it runs on, this change applies to you. Here is what actually happens when the CRA asks, and how to be ready before it does.

Transfer Pricing Documentation in Canada: What Changed Under Section 247

Bill C-15 overhauled section 247 of the Income Tax Act (ITA) for taxation years beginning after November 4, 2025. Three changes matter most for cross-border fintech groups:

• Delineation first. The rules now expressly incorporate OECD-style concepts: the CRA looks at economic substance and actual conduct — who performs the functions, where key decisions are made, and which entity bears the risks — not just what the intercompany agreement says.
• Broader contemporaneous documentation. Full documentation under subsection 247(4) now has to cover relevant group-wide transactions, realistic alternatives available to the parties, and why the selected method is the most appropriate under the OECD Guidelines.
• A 30-day delivery deadline and a higher penalty threshold. The 10% transfer pricing penalty applies where adjustments exceed the lesser of $10 million (up from $5 million) and 10% of gross revenue.

The penalty mechanics are where the 30-day rule bites. You avoid the penalty by showing you made “reasonable efforts” to price at arm’s length — but that defence is only available if your contemporaneous documentation was prepared on time and delivered within 30 days of the CRA’s request. A good file that arrives on day 45 is treated much like no file at all.

The New Simplified Regime: Four Thresholds, One Election

On July 23, 2026, the Department of Finance released draft regulations (new Part XCVIII of the Income Tax Regulations) that let qualifying taxpayers elect into lighter documentation under subsection 247(4.1). The proposed regime applies to taxation years beginning on or after January 1, 2026, and the comment period closed on September 4, 2026. The four categories:

• Small taxpayers: gross revenue of the Canadian entity plus all other Canadian-resident members of the multinational group is $25 million or less in the prior year — and there are no IP transfers or royalty payments.
• Tangible property: related-party purchases or sales of $5 million or less per year, per transaction or series.
• Intra-group services: $2 million or less per year, per transaction or series.
• Loans: gross interest of $1 million or less per year, per loan.

Two points catch fintech groups off guard. First, the $25 million test aggregates all Canadian group members, so a small Canadian dev shop owned by a large group may not qualify. Second, any royalty or IP transaction disqualifies the small-taxpayer category — and a Canadian entity licensing the group’s trading engine or wallet software is paying exactly that kind of royalty.

The regime is also not a safe harbour. You still need an arm’s length analysis, a description of terms and conditions, and annual updates for material changes — prepared by your filing-due date and delivered within 30 days of a request. An anti-avoidance rule disqualifies anyone who splits transactions or restructures entities to fit under the thresholds.

Where Fintech and Digital Asset Groups Usually Fall Short

In our experience, the problem is rarely the pricing itself. It is that the paper trail does not match how the business actually runs:

• “Routine service provider” on paper, decision-maker in practice. The Canadian team is billed at cost plus 5%, but the CTO and head of product sit in Toronto. Under a delineation-first framework, that mismatch is the first thing an auditor will test.
• Intercompany loans with no credit analysis. Parent funding at 0% or an arbitrary rate, with no documented borrower credit rating, purpose or terms. The loans category requires all of these, even under the simplified regime.
• Token and treasury flows left out. Stablecoin transfers between group wallets, market-making arrangements and token grants to Canadian staff are often never characterized as intercompany transactions at all.
• Documentation written after the fact. “Contemporaneous” means ready by the documentation-due date — your tax return filing deadline — not assembled once the CRA letter arrives.

A 30-Day Readiness Checklist

Treat this as the minimum your Canadian entity should have on file before its next return is filed:

• Map every cross-border related-party flow — services, loans, IP licences, cost-sharing, and digital asset transfers — with annual gross amounts.
• Test each flow against the four simplified-regime thresholds and decide, flow by flow, whether electing in is worth it. The election must be filed by the documentation-due date; miss it and full subsection 247(4) documentation applies.
• Refresh the functional analysis so it reflects where people, decisions and risks actually sit today, not at incorporation.
• Update intercompany agreements to match conduct, including price-adjustment mechanisms (which also matter for customs valuation if you import hardware).
• Assemble a single delivery-ready package with a named owner, so a CRA request can be answered in days rather than weeks.
• Coordinate with the treaty position. For Canada–US, Canada–Singapore and Canada–Hong Kong structures, make sure transfer pricing, permanent establishment and withholding analyses tell the same story. Our global structuring advisory team reviews these together rather than in silos.

Enforcement is moving in the same direction: Bill C-31 (first reading May 6, 2026) proposes stronger CRA audit powers, including notices of non-compliance and daily penalties. A clean, current transfer pricing file is becoming the cheapest insurance a cross-border group can buy.

The Bottom Line

Canada’s new transfer pricing rules do not necessarily mean more tax — they mean less time and less tolerance for documentation gaps. The 30-day deadline turns transfer pricing from a year-end exercise into a standing readiness obligation. If your Canadian entity has not reviewed its intercompany arrangements since the Bill C-15 changes, now is the time, with a clear view of which transactions qualify for the simplified regime and which need a full file under our cross-border tax structuring review.

Need guidance? Reach out to our team — no pressure, no jargon.