Square has reported Canadian merchant transaction data to the Canada Revenue Agency (CRA) under a 2017 Federal Court order. The CRA retains authority to request merchant information from payment processors at any time. CRA can access Square data through third-party information requests, Federal Court orders, or under Canada’s new digital platform reporting rules that took effect January 1, 2024. All Square income remains taxable and must be self-reported regardless of whether the platform shares your data with CRA.
Does Square Report to the CRA?
Square reported merchant data to CRA under a 2017 Federal Court order and can be required to disclose information again through CRA’s third-party information request powers or under Canada’s digital platform reporting rules. CRA uses third-party data from payment processors to identify unreported income in the platform economy, where gig workers and small businesses process billions of dollars in transactions annually (CRA — Taxes and the platform economy).
The 2017 Federal Court order required Square Canada Inc. to share names, addresses, banking information, and transaction totals for merchants who processed more than CAD $20,000 annually between 2012 and April 2016 (Square Canada — CRA Information Request FAQs). This one-time historical disclosure demonstrates CRA’s authority to compel payment processors to reveal client data for tax enforcement purposes.
Canada implemented new Reporting Rules for Digital Platforms under Part XX of the Income Tax Act, effective January 1, 2024, requiring certain platform operators to automatically report seller information to CRA annually by January 31. Part XX applies to platforms that connect sellers with customers and control payment flows, but explicitly excludes software that exclusively processes payments.
Small businesses and gig economy sellers who use Square for in-person or online sales should understand both their income reporting obligations and how CRA obtains payment processor data.
The 2017 Federal Court Order: When Square Reported to CRA
The Federal Court ordered Square Canada Inc. in 2017 to disclose names, addresses, banking information, and monthly transaction totals for Canadian merchants who processed more than CAD $20,000 annually between 2012 and April 2016. Square complied with the order and sent CRA detailed merchant data for accounts meeting the threshold, including device identifiers for Square Readers and Square Stands linked to each account.
CRA issued the Federal Court order as part of its underground economy enforcement initiative targeting unreported income from platform and gig economy sellers. The order applied to merchants operating in Canada during the specified period, regardless of whether they were self-employed individuals or incorporated businesses.
| Data Field | What Square Shared with CRA |
| Name | Legal name and business name (if applicable) for each merchant account |
| Address | Mailing address on file for the merchant account |
| Banking Information | Bank account details used for deposit transfers |
| Transaction Data | Total monthly aggregate of all transactions processed through Square |
| Device Information | Number and type of Square Readers and Square Stands linked to the account |
The CAD $20,000 annual processing threshold applied only to this specific Federal Court order and does not represent an ongoing reporting requirement. Square does not automatically share merchant data with CRA under normal operations. The 2017 Federal Court order was a one-time historical request, though CRA retains the authority to issue new third-party information requests or Federal Court orders at any time.
Canada’s Digital Platform Reporting Rules (Part XX)
Part XX of the Income Tax Act, effective January 1, 2024, requires reporting platform operators to collect seller identification data and report total consideration and transaction counts to CRA annually by January 31 (CRA — Reporting Rules for Digital Platforms).
Part XX rules implement the Organisation for Economic Co-operation and Development (OECD) Model Reporting Rules for Digital Platforms, an international framework designed to capture income from gig and platform economy activities.
Digital platform operators like Uber Eats, Patreon, and Whatnot have publicly acknowledged Part XX reporting obligations to CRA, while payment processors like PayPal and eBay have faced similar scrutiny over platform classification.
Reporting platform operators must collect and verify each reportable seller’s name, address, tax identification number (TIN) or business number, date of birth (for individuals), bank account identifiers, and the total consideration paid or credited per quarter. Platforms must submit this seller data to CRA by January 31 for the preceding calendar year and may share data with partner jurisdictions under international tax information exchange agreements.
Platform economy sellers who use multiple marketplaces or service apps should track their combined income across all platforms to ensure complete CRA reporting.
Who Must Report: Reportable Sellers vs. Excluded Sellers
Sellers with fewer than 30 relevant activities AND less than $2,800 in total consideration during a calendar year are classified as “excluded sellers” and are not reported to CRA under Part XX. Both conditions must be met for exclusion; sellers who exceed either threshold become reportable sellers whose data platforms must be sent to CRA.
Relevant activities include the sale of goods, the rental of immovable property (real estate), personal services (freelancing, consulting, tutoring), and the rental of any mode of transportation (cars, bikes, scooters). Platforms count each transaction, ride, booking, or service delivery as one relevant activity when determining the 30-activity threshold.
| Seller Status | Criteria |
| Excluded Seller | Fewer than 30 relevant activities AND less than $2,800 total consideration in the calendar year |
| Reportable Seller | 30 or more relevant activities OR $2,800 or more total consideration in the calendar year |
Reporting platform operators must collect tax identification numbers (Social Insurance Numbers for individuals, business numbers for corporations), addresses, dates of birth, bank account identifiers, and Financial Institution Identification Numbers (FIINs) for reportable sellers. Platforms must report total consideration paid or credited each quarter, the number of relevant activities, any fees or taxes withheld, and whether consideration was paid to the seller or withheld by the platform.
Do You Still Need to Report Square Income if the Platform Reports?
All income earned through Square is taxable and must be self-reported on your tax return, regardless of whether Square or any other platform reports your earnings to CRA. CRA states clearly: “All income is taxable… You need to report your income even if the online platform doesn’t report it to the CRA.” Square or any platform reporting serves as a cross-checking tool for CRA, not a substitute for seller self-reporting obligations.
Self-employed individuals using Square must report gross revenue from all sales and services on Form T2125 (Statement of Business or Professional Activities), then deduct eligible business expenses to calculate net income. Gross revenue includes all amounts received before deducting Square processing fees, which you claim as a business expense alongside other costs like supplies, equipment, and advertising.
CRA’s enforcement approach treats platform-reported data as verification against your filed tax return. CRA matches information received from platforms against individual tax returns to identify discrepancies and unreported income. Sellers who fail to report platform income face reassessment, interest charges on unpaid taxes, penalties ranging from 10% to 50% of unreported amounts, and potential prosecution for tax evasion in serious cases.
Your reporting obligation exists regardless of payment method, transaction volume, or whether you receive a tax slip from the platform. Income reporting requirements do not change based on whether you accept cash, credit cards through Square, e-transfers, or any other payment method. All business income must be reported on your tax return, supported by complete records of sales and expenses.
What If You Haven’t Reported Past Square Income?
Taxpayers who correct unreported Square income through CRA’s Voluntary Disclosures Program before CRA contacts them can avoid prosecution and eliminate gross negligence penalties (typically 50% of unreported tax).
A valid voluntary disclosure must be voluntary (made before CRA contacts you about the issue), complete (disclose all unreported income for all affected years), accurate (provide correct amounts and documentation), and include payment or payment arrangements for taxes owing.
CRA accepts voluntary disclosures when taxpayers come forward on their own initiative to correct tax reporting errors, omissions, or misrepresentations. Accepted voluntary disclosures eliminate the risk of prosecution, provide relief from gross negligence penalties, and may reduce failure-to-file and failure-to-report penalties (CRA — Voluntary Disclosures Program Overview). Interest charges on unpaid taxes continue to apply from the original due date, but penalty relief significantly reduces the total amount owing.
Taxpayers who discover unreported Square income from previous years should consult a tax professional to evaluate whether a voluntary disclosure is appropriate and properly structure the submission.
How Square Helps Merchants Meet CRA Requirements
Square provides Canadian merchants with monthly tax invoices showing processing fees and indirect taxes, plus downloadable transaction reports from the Square Dashboard that reconcile with CRA income reporting requirements. Square’s compliance tools help merchants maintain organized records meeting CRA’s six-year document retention requirement for business records.
| Tool | What It Provides | Where to Find It |
| Monthly Tax Invoice | Itemized breakdown of Square processing fees, statement fees, and GST/HST charged on fees | Emailed monthly; also available in Square Dashboard under Account & Settings > Business > Tax Invoices |
| Transaction Reports | Detailed sales data, including date, time, amount, payment method, and items sold for every transaction | Square Dashboard > Reports > Transactions; export to CSV or Excel |
| Fee Summary | Total processing fees, chargeback fees, and other Square charges by month or custom date range | Square Dashboard > Account & Settings > Business > Processing Fees |
To access and export your Square transaction data:
- Log into Square Dashboard and click “Reports” in the left sidebar
- Select “Transactions” from the report menu
- Choose your date range (monthly recommended for consistent record-keeping)
- Click “Export” and select either “CSV” or “Excel” format
- Import the downloaded file into your bookkeeping software via the appropriate import function
Canadian businesses must register for GST/HST when taxable supplies exceed $30,000 over four consecutive calendar quarters, regardless of which payment processor they use (CRA — When to register for GST/HST). Square users who cross the $30,000 threshold must register for a GST/HST account, begin charging GST/HST on taxable sales, and file periodic GST/HST returns with CRA. Square’s transaction reports help calculate total taxable supplies for threshold monitoring.
FAQs About Square and CRA Reporting
Can CRA see my Square transactions?
Yes, CRA can access Square transaction data through third-party information requests or Federal Court orders.
What information does Square send to CRA under the digital platform rules?
Square sends seller names, addresses, tax identification numbers, bank account identifiers, and total consideration annually if Square operates as a reporting platform operator under Part XX.
If I only use Square as a payment processor, do they report me?
CRA guidance states that software exclusively processing payments is not a “platform” under Part XX, so pure payment processing does not trigger automatic digital platform reporting.
Does the $20,000 threshold from 2017 still apply?
The CAD $20,000 threshold applied only to the specific 2017 Federal Court order covering merchant transactions from 2012 to April 2016 and does not represent an ongoing automatic reporting threshold.
What happens if CRA finds unreported Square income?
CRA can reassess your tax return for any year within the normal reassessment period (generally three years). They can pursue prosecution for tax evasion in cases involving deliberate concealment or fraud.
Do I need to register for GST/HST if I use Square?
Square does not determine GST/HST registration requirements; your total taxable sales from all sources (Square, cash, other payment methods) determine when registration becomes mandatory.
What are reportable sellers and excluded sellers under the CRA’s digital-platform rules?
Sellers with fewer than 30 relevant activities AND less than $2,800 in total consideration during a calendar year are “excluded sellers” not reported to CRA under Part XX. Sellers who exceed either threshold become reportable sellers whose data platforms must send to CRA, including names, addresses, tax identification numbers, and quarterly transaction totals.
Conclusion: Stay Compliant When Using Square for Business
Square has reported Canadian merchant data to CRA in the past and can be required to disclose transaction information again through legal requests or digital platform reporting rules, making accurate self-reporting essential for all Square users. All Square income is taxable and must be reported on your tax return, regardless of whether Square shares your data with CRA.
Canadian business owners who maintain complete records using Square’s monthly tax invoices and dashboard reports report all Square income on their tax returns. Working with experienced tax professionals can help you confidently navigate CRA’s platform economy enforcement initiatives.
