9. Taxation Payable

12 Months Ended

Dec. 31, 2015

Notes to Financial Statements

9. Taxation Payable

9. Taxation Payable

The Company has the following outstanding tax liabilities:

a) Harmonized Sales taxes

This represents sales tax liabilities in Canada, these taxes were never paid, management intends paying these taxation liabilities together with interest and penalties thereon, when sufficient funds are raised to do so.

b) Payroll taxes

The Company is delinquent in filing its payroll tax returns resulting in taxes, interest and penalties payable at December 31, 2015 and 2014. As of December 31, 2015 and 2014 as part of Taxes Payable, the Company has payroll tax liabilities of approximately $1,780,000 and $2,065,000, respectively due to various taxing authorities. If the Company does not satisfy these liabilities, the taxing authorities may place liens on its bank accounts which would have a negative impact on its ability to operate. Further, the actual liability may be higher due to interest or penalties assessed by the taxing authorities.

c) US taxation and penalties

The Company has assets and operates a business in Canada and is required to disclose these operations to the US taxation authorities, the requisite disclosure has not been made and management has reserved the maximum penalty due to the IRS in terms of non-disclosure. This non-compliance with US disclosure requirements is currently being addressed.

The taxes and penalties due as of December 31, 2015 and 2014 is as follows:

	December 31, 2015		December 31, 2014
Payroll taxes and Harmonized sales taxes	$	2,290,506	$	2,656,297
US taxes and penalties		200,000		150,000
	$	2,490,506	$	2,806,297