Canada: Canadian Federal Court pulls the reins in (slightly) on foreign information requests

International Tax Review is part of Legal Benchmarking Limited, 1-2 Paris Garden, London, SE1 8ND

Copyright © Legal Benchmarking Limited and its affiliated companies 2025

Accessibility | Terms of Use | Privacy Policy | Modern Slavery Statement

Canada: Canadian Federal Court pulls the reins in (slightly) on foreign information requests

Gagnon-Jean-Marc
Carbone-Alexandra

Jean Marc Gagnon

Alexandra Carbone

In Amdocs Canadian Managed Services Inc. (ACMS), the Federal Court denied the Canada Revenue Agency's (CRA) request under section 231.7 of the Income Tax Act, Canada (Act) to compel ACMS to provide the CRA with documents and information requested in the course of a transfer pricing audit.

The CRA alleged that queries had not been satisfactorily answered, leaving the CRA in a position where it would have to audit and assess ACMS based on incomplete information.

ACMS contended that although the documents requested were not within its control, it had taken reasonable steps to obtain the information and provide it to the CRA. ACMS submitted that it could not be compelled to provide documents that are not in its possession or control or to create documents that did not exist. If such documents existed, they were located outside Canada, outside ACMS's control and did not fall within the provisions supporting the CRA's application.

The judge noted that it is within the CRA's prerogative to request information over the course of the audit, and found that ACMS had failed to comply in this regard. He also found that ACMS had made reasonable efforts to acquire the documentation at issue, thereby falling within an exception to complying with information requests. Noting that there was no purpose in ordering ACMS to do something it could not do, the judge declined to grant the CRA the relief sought.

Although the taxpayer was successful in this case, the judge acknowledged the CRA's broad discretion to request information from taxpayers during an audit and that other provisions of the Act would have better served CRA's interest. The CRA may have to be more accepting of taxpayers that have made reasonable efforts to comply with its requests but are unable to do so, or be more specific in its information requests.

Jean Marc Gagnon (jean.gagnon@blakes.com) and Alexandra Carbone (alexandra.carbone@blakes.com)

Blake, Cassels & Graydon

Tel: +1 514 982 5025 and +1 514 982 5034

Website: www.blakes.com

more across site & shared bottom lb ros

More from across our site

As World Tax unveils its much-anticipated rankings for 2026, we focus on EMEA’s top performers in the first of three regional analyses
Firms are spending serious money to expand their tax advisory practices internationally – this proves that the tax practice is no mere sideshow
The controversial deal would ‘preserve the gains achieved under pillar two’, the OECD said; in other news, HMRC outlined its approach to dealing with ‘harmful’ tax advisers
Former EY and Deloitte tax specialists will staff the new operation, which provides the firm with new offices in Tokyo and Osaka
TP is a growing priority for West and Central African tax authorities, writes Winnie Maliko, but enforcement remains inconsistent, and data limitations persist
The UK tax agency has appointed six independent industry specialists to the panel
The two tax partners have significant experience and expertise in transactional and tax structuring matters
Katie Leah’s arrival marks a significant step in Skadden’s ambition to build a specialised, 10-partner London tax team by 2030, the firm’s European tax head tells ITR
Increasingly, clients are looking for different advisers to the established players, Ryan’s president for European and Asia Pacific operations tells ITR
Using tax to enhance its standing as a funds location is behind Luxembourg’s measures aimed at clarifying ATAD 2 and making its carried interest regime more attractive
Gift this article