The Canada Revenue Agency has mandated PayPal to send their information regarding the account holders of the said business. Tax officials are currently searching for businesses that fail to report their entire income to the agency. This is the reason why accountants need to have CRA audit protection to avoid unexpected fees and charges.
According to the company, an order from the Federal Court mandates them to provide the needed information regarding business accounts that have either sent or received a payment from January 1, 2014 until November 10 of this year.
Private information of customers who are enrolled under personal accounts in PayPal will not be disclosed.
The company said that they have already notified customers that will be affected by the order and they are open to be contacted anytime for any questions and concerns. They have already updated their Help Centre for customers to know about the orders they were given and their responsibility to report.
Furthermore, the request will only be granted one time and the information will be sent to the CRA. Business accounts that are under the Canadian PayPal with transactions from the year 2014 until 2017 will be included in the report. The request is not an ongoing one as feared by others. It is common for the CRA to request a court order every now and then as they are following the Excise Tax Act as well as the Income Tax Act. These are made to make sure organizations will provide information necessary with regards to a business or an individual. The information will be used solely for the purpose of tax reporting.
Other companies have received a Federal Court order before including eBay Canada in 2009 and in 2016 the Square Canada was also sent one. These companies were requested to send information regarding specific customers to the CRA.
Patrick Samson, the spokesperson of CRA, said that the underground economy has a negative impact to the tax base in Canada, the consumers as well as the businesses. This is why the CRA is encouraging everyone to comply with measures regarding taxes to makes sure that the process is fair.
This is why many businesses and accounting firms are seeking CRA audit protection in order to have their businesses and companies covered in times like this.
