Case Report – Jurisdiction to order production of non-resident data

27 Sep

The Federal Court rejected an application to vacate a production order made under section 231.2 of the Income Tax Act. The order required two Canadian eBay subsidiaries to produce data about specific Canadian eBay users that resided on servers operated by eBay’s American subsidiary in the United States.

The Court dealt only with the issue of whether it had jurisdiction to order production of non-resident data because the parties agreed that the Court should reserve on whether there was a sufficient basis for the order pending resolution of the appeal in Canada (MNR) v. The Greater Montreal Real Estate Board, 2006 FC 1069 (CanLII). On the threshold issue, the Court stated:

In the present case, eBay Canada has access to and uses information respecting PowerSellers. It is not determinative of the issue that the electronic apparatus storing the information which eBay Canada accesses is outside Canada. The information can be summoned up in Canada and for the usual business purposes of eBay Canada. The situation may be different if the information never had been used in Canada.

For commentary by Michael Geist, please click here.

eBay Canada Limited v. Canada (National Revenue), 2007 FC 930 (CanLII).

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One Response to “Case Report – Jurisdiction to order production of non-resident data”

Trackbacks/Pingbacks

  1. Case Report - SCC says CRA may audit one taxpayer through another « All About Information - August 3, 2008

    […] given a meaningful role in the enforcement scheme. It seems to me that the eBay case (see here and here), where the CRA utilized section 231.2 to demand production of the account and transaction records […]

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