Shopify wins case against Canada Revenue Agency over merchant data

Article content

Shopify Inc. has come out on top of a battle with the Canada Revenue Agency.

A federal court order issued Thursday shows Judge Guy Regimbald sided with the Canadian tech company, which was fighting the CRA’s attempt to get more than six years of Shopify records.

The records were being sought in order to verify that Canadian merchants using Shopify software were obeying the Income Tax Act and the Excise Tax Act.

The CRA wanted the names of individuals who own Shopify accounts, their birthdates, addresses, phone numbers and their bank transit, institution and account numbers.

It also asked for their Shopify ID numbers, what type of store they ran, when their Shopify accounts were activated or closed and how many transactions and their value were made over the six-year period the CRA was interested in.

Some of the information had been requested by the Australian Tax Office, which wanted to ensure Shopify merchants were complying with the country’s laws. A separate case Judge Regimbald presided over saw the CRA ask for court permission to obtain and send the records to Australia.

CRA spokesperson Sylvie Branch said the agency is aware of the courts decision and “is currently analyzing the case details and associated information.”

Shopify pointed The Canadian Press to a post on X from its CEO Tobi Lutke who shared the outcome of his company’s court battle and called the CRA’s behaviour “blatant overreach.”

Shopify fought the CRA in both cases when they were filed in 2023, insisting the group of merchants the agency wanted information for was “overly broad and inconsistently defined.”

The company also claimed a multilateral tax treaty being used to seek the information for Australia “is without domestic force” when information about unnamed people is being requested.

Regimbald ultimately decided not to order Shopify to turn over the records to the CRA because he found the tax agency had not outlined an identifiable group of individuals whose data it wanted.

He said the court would not entertain a request to hand over information on unnamed parties “that is unintelligible, incoherent, or otherwise beyond its understanding.”

As part of his order, Regimbald requested the CRA pay legal costs of $45,000 in each case, bringing the government’s bill to $90,000.