Shopify CEO vows to fight demand from CRA for six years of Canadian trading records

E-commerce giant Shopify plans to fight a demand from the Canada Revenue Agency (CRA) for six years of records of more than 121,000 Canadian merchants working with the platform to build online stores.

“I don’t really want a fight with the CRA (Canada’s tax agency) – but we were asked to backchannel 6 years of records for all Canadian Shopify stores,” Shopify Chief Executive Officer Tobi Lutkey said in a statement. tweet on June 23.

“This feels like a low-key overreach to me. We will fight this,” he wrote.

In May, Shopify Inc. announced that it would cut its workforce by 20 percent and sell the logistics component of its business to a supply chain management firm to focus more on its e-commerce goals.

The Epoch Times sent a request to Shopify for comment, but did not hear back from the press.

CRA spokeswoman Hannah Wardell told The Epoch Times via email on June 25 that the tax collection agency “uses the information obtained through the requirements of the unnamed persons (UPRs) to identify taxpayers who may not have complied with the rules. met, and verifies that they have met their income and filing obligations under the laws administered by the CRA.”

She said the “CRA takes the security and privacy of all taxpayer information very seriously.”

“We collect information where it is lawful and directly related to compliance activities. Information collected through the UPR process is controlled and protected according to CRA standard practices to protect the privacy of personal information.”

Due to confidentiality provisions of the acts performed, the CRA said it cannot comment or release information about taxpayers.

“The CRA must obtain judicial approval before imposing an obligation on a third party to obtain information about one or more unnamed individuals. Publicly available information on this case can be obtained through the courts as the filing is governed by the process set forth in the Federal Courts Rules.

Tax Inner

According to an examination of Federal Court records, the Secretary of National Tax filed a action v. Shopify in court on April 14, 2023, citing parts of the Income tax law And Excise law.

Some tax experts to suggest that Shopify has data on its customers’ businesses, including “what was sold, when it was sold, their sales, and revenue,” which would give CRA everything it needs to monitor those businesses instead of going to vendors on the platform and check them individually, Toronto Star reported.

In 2017, online payments giant PayPal was instructed to hand over data about its Canadian business account holders to CRA. PayPal said on its website that CRA has obtained a federal court order requiring it to release within 45 days information about account holders and the amount and number of payments sent or received through the platform between Jan. 1, 2014, and Nov. 10. 2017.

At the time, a CRA spokesperson said the agency requested the information to ensure tax compliance under the Income Tax Act, saying the agency used third-party data to track unreported economic activities and identify individuals and companies who did not file a tax return. The court order applied to all account holders, including those whose business accounts were closed, PayPal said.

The CRA made a similar request to an online auction site in 2008 eBay.com, which requires it to provide the names and gross sales figures for so-called “power sellers,” referring to eBay sellers who sell more than $1,000 per month on the site for three consecutive months. At the time, many eBay users complained that they were selling used goods or old clothes and had already paid taxes when they originally purchased the items.

The Canadian Press contributed to this report.