The Canada Revenue Agency (CRA) launched an audit into Eli Lilly’s Canadian division. Federal court filings revealed the investigation on August 17, 2026.
The agency is scrutinizing the company’s 2020 profit margins. Officials described these margins as suspiciously below the industry norm.
The audit focuses on transfer pricing practices involving inventory from related offshore entities. A significant portion of these transactions originated in Ireland, a low-tax jurisdiction.
The CRA filed a lawsuit to compel Eli Lilly Canada to disclose withheld documents. While the audit is ongoing, it could lead to a substantial tax dispute.