120,000 Canadian Merchants over 6 Years’ Data Demanded by CRA for Possible Tax Audit
Toronto Star
CRA Demands Merchants’ Information
Is CRA planning tax audit on eCommerce merchants? It seems to us that CRA is planning something big.
According to Toronto Star, the Canada Revenue Agency (CRA) has requested Shopify to hand over ALL its Canadian merchants’ business information so that it can conduct tax audits on these merchants. These data includes up to 120,000 Canadian merchants over the past 6 years.
It is quite rare that CRA demands so much information. Imagine how much time CRA will spend just to go over the data. It seems that CRA is planning to conduct a huge campaign in tax evasion crackdown and Shopify could be just the first one.
SHOPIFY vs. CRA
Shopify is fighting the request. So let’s wait and see how thing will play out in the court. At the same time, I can’t help wondering: what if IRS also joins the bandwagon and requests the data from all U.S. merchants? We all know there are much more U.S. merchants than the Canadian counterpart using Shopify’s platform.
Tax drama may be fun to watch – as long as we are not the one being targeted. Most Canadians will probably like CRA to conduct more tax audits and catches more tax evasions.
Peace of Mind
If you have already reported your income honestly, you have nothing to worry about and can enjoy the peace of mind at this moment. Even if you had made some mistakes in calculating your profits, CRA can only audit the most recent 3 years’ tax return under the normal circumstances (in other words, no fraud or gross negligence involved). That’s the benefit of filing your taxes on time.
if you haven’t reported the income from your eCommerce activities, it’s time to start the accounting process to determine the profits. You may have a lot owing because, without proper bookkeeping, you may have many deductions that you didn’t take into considerations.
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Photo by Andrea Piacquadio