Oshawa, Ontario, June 13, 2011… The Canada Revenue Agency (CRA) announced today that Pro-Bel Enterprises Limited pleaded guilty on June 6, 2011, to one count each of income tax and Goods and Services Tax (GST) evasion in the Ontario Court of Justice in Oshawa. Pro-Bel was fined $266,904 for income tax evasion and $37,366 for GST evasion, which was paid immediately. The fine represents 200% of the total income tax and 100% of the GST evaded, and results in a total of $304,270 in fines.
Pro-Bel incorporated on May 18, 1988. It is a manufacturing company that produces an extensive product line of suspended access and fall protection equipment used for cleaning windows and maintaining the outside of large buildings.
A CRA investigation revealed that Pro-Bel claimed a total of $533,807 in non-business related expenses on its T2 corporate tax returns for the 2002, 2003, and 2004 tax years. A corresponding amount of $37,366 in Input Tax Credits was claimed on the GST returns of the corporation for the same period. As a result, the corporate tax returns filed on behalf of Pro-Bel understated Federal income tax payable by $133,451, while the GST payable was under remitted by $37,366.
The information in this news release was obtained from the court records.
When individuals or corporations are convicted of tax evasion, they have to pay the full amount of tax owing, plus interest, and any penalties the CRA assesses. In cases of gross negligence, the Income Tax Act and Excise Tax Act allow the CRA to assess a penalty of up to 50% of the unpaid tax or the improperly claimed benefit. In addition, the court may, on summary conviction, fine them 50% to 200% of the tax evaded, and sentence them to a jail term of up to two years.
Individuals who have not filed returns for previous years, or who have not reported all of their income, can still voluntarily correct their tax affairs. They will not be penalized or prosecuted if they make a valid disclosure before they become aware of any compliance action being initiated by the Canada Revenue Agency (CRA) against them. These individuals may only have to pay the taxes owing, plus interest. More information on the Voluntary Disclosures Program (VDP) can be found on the CRA’s website at www.cra.gc.ca/voluntarydisclosures.
Further information on convictions can also be found in the Media Room on the CRA website at www.cra.gc.ca/convictions.