Trading Company found for tax evasion

The Bureau of Internal Revenue (BIR) today filed a criminal complaint with the Department of Justice against PREMIER GLOBAL LINKS ENTS., INC. (PGLEI) and its President NELSON L. CHENG and Treasurer/Secretary CAROLINE T. CHENG for willful attempt to evade or defeat tax and deliberate failure to supply correct and accurate information for failure to declare in the financial statements the purchase of a land in 2005, in violation of Section 254 and Section 255 of the National Internal Revenue Code of 1997, as amended (Tax Code).

PGLEI is a domestic corporation engaged in the business of manufacturing and trading of goods such as audio and video blank tapes and paper products on a wholesale or retail basis. Its principal place of business is located at No. 5, Basa St., Paltok, San Francisco Del Monte, Quezon City.

Documents show that BIR investigated PGLEI for taxable years 2005 to 2009. PGLEI, however, refused to cooperate with the BIR by not making its books of accounts and other accounting records available for examination despite the issuance and service of the required Letters of Authority and Notices. A criminal complaint was also filed with the Quezon City Prosecutor’s Office against the respondents for failure to comply with the Subpoena Duces Tecum by the BIR.

In the course of the investigation, the BIR discovered that PGLEI purchased a piece of land from Ayala Land., Inc. on February 8, 2005 with a gross selling price of P41.69M. PGLEI, however, failed to report said acquisition in its Comparative Audited Financial Statements for taxable years 2005 and 2006 which was attached to the Income Tax Return (ITR) for 2006.

PGLEI’s ITR for 2005, however, showed a gross sales of only P4.26M. Thus, it became evident that PGLEI failed to declare in its ITR the amount of P41.69M used to acquire the subject lot resulting to an undeclared income subject to income tax. The said income is also subject to VAT which PGLEI again failed to declare in its quarterly VAT return.

PGLEI was assessed a total tax liability in the aggregate amount of P52.60M, inclusive of surcharge and interest, broken down into Income Tax of P40.72M and VAT of P11.88M.

The case against PREMIER GLOBAL LINKS ENTS., INC. (PGLEI) and its President NELSON L. CHENG and Treasurer/Secretary CAROLINE T. CHENG is the ninety-fourth (94th) filed under the Run After Tax Evaders (RATE) program of the BIR under the leadership of Commissioner Kim S. Jacinto-Henares.