Clause 60 provides the more significant amendment relating to transfer pricing. As we have discussed, transfer pricing refers to the prices charged in cross-border transactions between non-arm's-length parties. When those rules apply, they essentially can reprice or recharacterize transactions to be in accordance with arm's-length terms and conditions.
This measure would clarify the interaction between the transfer pricing rules on the one hand and the other rules in the Income Tax Act on the other hand so that it's clear how the rest of the rules in the Income Tax Act work once there has been a transfer pricing reassessment.
For example, if a Canadian company pays $100 to a foreign non-arm's-length party, and an arm's-length price for that widget would have been $60, then the price paid for the widget under the cost of sale to the Canadian company would be reduced from $100 to $60. Then it tells you to plug that $60 into the rules in the other act in order to determine your tax liability.
It clarifies the interaction between the transfer pricing rules and the rest of the rules of the Income Tax Act to allow for transfer pricing to come first.