ExxonMobil Wins in $26.5 Million Deductibility Fight in Canada

The Tax Court of Canada approved Exxon Mobil Corp.'s appeal of a Canada Revenue Agency audit denying the company a C$36.2 million ($26.5 million) tax deduction for a natural gas pipeline study, sidelining agency claims that transfer pricing rules negated the deduction.

In a ruling posted Monday, the court said transfer pricing rules didn’t apply in the case, nor did a limitation on deductions the agency applied in an audit.

The agency’s claim that the funding arrangement for the study breached transfer pricing provisions is “not justifiable,” Justice Dominique Lafleur wrote.

Transfer pricing refers to transactions within a corporate ...