CRA PayPal Order
The CRA has won a battle against tax evasion, and has put many Canadian businesses that use PayPal in a difficult position. The CRA has obtained an order from the Federal Court of Canada requiring PayPal to hand over details of its business account customers to the CRA. The focus of the court order is any Canadian business account holder that processes any transactions from 2014 on. This will allow the CRA to use PayPal information to see whether Canadian businesses have been declaring all their income. The CRA PayPal order comes months after the CRA obtained a similar order for payment processor Square.
The failure to report all income will result in additional tax, interest, and penalties being applied. This can also result in criminal prosecution of the taxpayers involved. There may be a way for affected persons to avoid criminal prosecution, penalties, and even some interest through the Voluntary Disclosure Program. There are pre-conditions to being eligible for this program and a tax expert will have to assess individual cases to see if those with PayPal accounts affected by the order may be eligible.
The CRA has been stepping up its efforts to find tax evaders and un- or under-reported income by taxpayers. This is a sign that the taxman is becoming more aggressive. If you have not declared all of your income or have been keeping income or property hidden, it may be time to come forward. There are fewer and fewer places to hide from the CRA.
Note: Articles are for general information only and do not constitute tax advice nor can they be relied upon. Call Faris CPA for assistance.