Ebay Canada must produce names of PowerSellers to CRA

For Canadians selling products on Ebay Canada, your contact information (name, address, email address) and annual sales figures can now be accessed by Canada Revenue Agency in certain circumstances.

The Federal Court of Appeal recently upheld a lower court case which ordered Ebay Canada to disclose information for high-volume sellers (called “PowerSellers”) to CRA. Someone qualifies as a PowerSeller if they have sales ranging from $1,000- $150,000 a month. CRA wanted to confirm that Canadian PowerSellers were reporting income earned through their Ebay Canada sales for tax years 2004-2005. Contact information for PowerSellers resides on computer servers located in the U.S., which are owned by the U.S. parent company of Ebay Canada (Ebay Inc.). However, the court decided that the location of the servers does not preclude an order under the Income Tax Act requiring disclosure of information since Ebay Canada has the ability to access the information located on these servers.

No doubt, this case will have implications for e-commerce which go beyond Ebay.