Chief executive officer of Shopify Tobias Lutke tweeted on Friday that the company intends to fight a request from the Canada Revenue Agency (CRA) to turn over six years of records of more than 121,000 Canadian stores using the firm’s platform.
he government is, reportedly, seeking the records in order to verify that Canadian merchants were obeying the Income Tax Act and the Excise Tax Act.
Both acts require approval from a Federal Court judge in order to obtain such documents through a third party, in this case Shopify. Court documents show that CRA has not received approval yet.
But tax accounting firm Tax Heroes says that the agency will likely receive approval as it fulfills the necessary requirements.
Shopify likely knows this, the accounting firm added, and is hence objecting “to enhance their reputation of defending merchants and other policy considerations.”
In the past, the CRA also sought records from PayPal and eBay over tax and reporting concerns.
The CRA said that it uses information obtained through “unnamed persons requirements (UPR) to identify taxpayers that may have been non-compliant and verifies that they have appropriately reported their income and have satisfied their filing obligations.”
According to federal court documents, the minister of national revenue began seeking the records in April this year.