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 2026

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

Pillar two compliance is creating unprecedented data demands for multinational tax departments, making closer collaboration with FP&A teams essential for accurate reporting and audit readiness
Among the arrivals is Andrew Howell, who leaves scandal-hit PwC Australia after representing PepsiCo in a high-profile TP dispute
ITR's podcast examines whether the big four have overarching cultural issues and assesses the competitive threat of technology-backed transfer pricing firms
The UK advisory firm has seen its global revenues expand by £27.2m following its listing and acquisition of Baker Tilly South-East Europe
Tax-trained John Sams, previously the firm’s CFO and COO, was appointed after a rigorous process, KPMG said
From Mauritius substance rules to Kenyan SEP tax and South African anti-avoidance measures, businesses must navigate growing scrutiny of cross-border IP structures in Africa
ITR spoke to multinationals, advisers and software providers about a June 30 deadline defined by faulty portals, high compliance costs and hard lessons
After years of onerous pillar two prep, businesses will be galled in seeing tax revenues outweighed by compliance costs
Tax advisers should revisit India secondment arrangements after the EY US ruling strengthened the Centrica precedent and raised fresh withholding concerns
Despite the shortfall, effective tax rates of multinationals have seen a ‘statistically significant rise’
Gift this article