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ARTICLE · 14 JUNE 2023

Blurring The Lines Between Inspection And Requirement Powers: Recent Legislative Amendments To Section 231.1

McCarthy Tétrault
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As set out below, the precise scope of the amendments is unclear and judicial guidance will be needed to delineate exactly how these amendments will operate going forward.

CanadaTax
Tax Perspectives
Tax Perspectives
Almut MacDonald
Almut MacDonald
Anu Koshal
Anu Koshal
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On December 15, 2022, amendments to section 231.1 of the Income Tax Act[1] came into force, which blur the lines between sections 231.1 and 231.2, expand the scope of the Canada Revenue Agency's ("CRA's") powers to collect documents and information from taxpayers, and potentially remove some procedural safeguards that taxpayers could previously rely on. As set out below, the precise scope of the amendments is unclear and judicial guidance will be needed to delineate exactly how these amendments will operate going forward.

The Amendments

According to the Department of Finance, one of the purposes of the amendments is to modernize the language of certain paragraphs and render it consistent with the language employed in subsection 288(1) of the Excise Tax Act.2 The text of the amendments, however, could be interpreted to do more than that. The changes triggered by the amendments include:

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