PayPal Canada Must Disclose Business Information to the CRA
PayPal has been directed to hand over information regarding its Canadian business holders to the Canadian Revenue Agency (CRA).
The digital payments giant announced that it has been served with a federal court order to disclose relevant information within 45 days to the CRA, information that identifies account holders and describes the total amount and number of payments sent or received between January 1, 2014 and the end of last week. The reasoning behind the court order is for the Canadian government to ensure that the individuals and corporations using PayPal are complying with their tax obligations.
“Specifically, the CRA is seeking PayPal’s list of Canadian clients who have a commercial account, including the total value of their transactions (purchases and sales) from 2014 to the date of the requirement,” said CRA spokesman Patrick Samson.
PayPal went on to state that the move is all part of a campaign to step up and use third-party data to find unreported financial data and locate individuals that skirt the tax return system. Users of the online money service are encouraged to make sure their filed tax returns are done in the right way, and if not, they should take advantage of the voluntary disclosure program that allows filers to adjust tax returns that have already been submitted.
PayPal Canada sports more than 6.4 million active users, though that figure includes personal accounts that are not affected by the CRA court order.
The idea behind the move is that the CRA believes some use PayPal to hide financial transactions from the forces that regulate and tax. It will be fairly easy for the government to comb through and track all the pertinent financial data, as the CRA is receiving a five-year boost to federal funding to help fight tax evasion. That funding has to go somewhere, so the easy pickings of PayPal fraudsters is a good place to start.
In the U.S., PayPal already submits information to the government for any user that has processed over $20,000 USD on the network or made more than 200 transactions in a given year. There is no such obligation in Canada though.
The worst part may be for PayPal customers who use the service the right way and claim money transfers above the board. Those users may have to collect all their statements and prepare for an audit if the CRA comes knocking.
Last month, PayPal made it even easier for users to send money as they introduced transfers through Facebook’s Messenger platform.