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High Fines for Users of Tax Cheating Software


Richard Weber on September 17, 2014 in Advice for Business Owners

Your accountant can advise you on financing options, investments, future planning and of course, strategies to minimize your tax payments. Business owners operating without this professional support may be tempted to underreport earnings so as to lower their tax obligations but this type of fraud comes with significant risk.

New ESS software (commonly known as “zapper” software) allows businesses to underreport their revenue and avoid paying taxes by deleting or modifying sales transactions in point-of-sale systems, electronic cash registers and accounting systems. The sophistication of the software purports to leave no record of the original transaction.

The fines for using this illegal software are substantial. Under new sanctions imposed by the Canada Revenue Agency, businesses that use, possess, or acquire ESS software will face a fine of $5,000 for the first infraction and $50,000 on any subsequent infraction. Anyone who participates in manufacturing, developing, selling, possessing or making ESS software available, will face a fine of $10,000 for the first infraction, and $100,000 on any subsequent infraction. Criminal charges of up to $1 million in fines and/or a jail term of up to five years may also be imposed.

Canadian taxation policies and applicable legislation were established to ensure equity and support a healthy economy for the benefit of all citizens. Adhering to federal tax laws and maximizing the allowable benefits  eliminates financial risk and ensures peace of mind.