Shopify Inc. has won a significant legal battle against the Canada Revenue Agency (CRA) after a federal court ruled in favor of the Canadian tech company. Judge Guy Régimbald sided with Shopify in denying the CRA’s request for over six years of data related to Shopify merchants.
CRA’s Request for Merchant Data
The CRA sought extensive personal and transactional information to verify compliance with Canadian tax laws. Some of the requested data included names, birthdates, addresses, banking details, and account activity over a six-year period. Additionally, the Australian Tax Office requested similar information to ensure compliance with its laws, and the CRA sought permission to share data with Australian authorities.
Court’s Ruling and Shopify’s Response
Judge Régimbald ruled that the CRA failed to specify an identifiable group of individuals for the requested data. The judge dismissed the request as “unintelligible, incoherent, or otherwise beyond its understanding.” Consequently, Shopify was not required to hand over the records.
Shopify CEO Tobi Lütke criticized the CRA’s approach on X, calling the agency’s demands “blatant overreach.” Shopify argued the group of merchants targeted was “overly broad and inconsistently defined,” and the multilateral tax treaty cited lacked domestic enforcement power.
The court ordered the CRA to pay legal costs totaling $90,000—$45,000 for each case—adding a financial consequence to the agency’s failed attempt to obtain the data.
What The Author Thinks
This ruling highlights the importance of tax authorities maintaining precise and reasonable standards when requesting sensitive personal information. Overly broad or vague data demands risk violating privacy and eroding trust. The CRA’s approach in this case serves as a cautionary example that legal clarity and respect for individual rights are crucial for effective investigations.
Featured image credit: Payment Dive
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