Hello,
This may seem like a dumb question... Say a company makes a profit and at the end of the fiscal year simply buys more services from a consultant but does not pay cash, simply logs a note payable to be paid whenever they have the money (the consultant is ok with that). This way, the company avoids a profit and then does not pay taxes. The note payable could be due to be paid back in a long time... like 10 or 100 years. Clearly, the company could keep doing this year after year.
This seems like some kind of fraud to me. But I would like to know exactly what law it is breaking (Canada).
I guess this also kind of extends into the question of... what happens if someone pays extra for a service.. is that not allowed too?
Thanks! NL