For business owner clients required to collect GST, failure to do so could have serious consequences.
In a release, CRA reminds that taxpayers convicted of GST evasion must still repay the full amount of taxes owing, plus interest and any civil penalties that may be assessed by the agency. In addition, the court may fine taxpayers up to 200% of the taxes evaded and impose a jail term of up to five years. If convicted of fraud under Section 380 of the Criminal Code, a taxpayer can face up to 14 years in jail.
The agency offered the cautionary case of a real estate developer sentenced to a conditional sentence order of two years less a day, which includes nine months house arrest and 150 hours of community service, and fined $462,092, representing 100% of the GST/HST he evaded.
A CRA investigation determined the developer contravened the Excise Tax Act by failing to report and remit the GST/HST collected from the sale of 44 units in a townhouse complex.
CRA also reminds of the voluntary disclosures program, whereby disclosures made before CRA launches an enforcement action, such as an audit or criminal investigation, may result in having to pay only taxes owed plus interest.