Valero – Federal Court of Appeal finds that requested judicial review of CRA’s requiring audit information collaterally attacked CRA’s assessing responsibility

Valero did not withhold under Reg. 105 on fees paid to non-resident carriers for international shipping services on the basis that such carriers’ income therefrom was exempt from Canadian tax. During an audit, Valero offered to make available all the requested international shipping information, provided CRA undertook not to assess any Reg. 105 withholding tax.

CRA thereafter issued a requirement under s. 231.2(1) for such information, and Valero requested an order setting aside the requirement. In finding that such a request could not succeed, Rivoalen JA stated:

… If an order setting aside the requirement for information is granted, the Minister will be prevented from properly exercising her powers under the Act. …

The Minister has not yet assessed. Once she has received the complete information and documents, she may well find that Valero has no liability. In my view, Valero cannot stop the Minister from carrying out her statutory duty under the Act to assess income tax payable by way of an application for judicial review.

Neal Armstrong. Summaries of Canada (Attorney General) v. Valero Energy Inc., 2020 FCA 68 under Federal Courts Act, s. 18.1(2) and ITA s. 231.2(1).