GVIC Communications Corp.

November 06, 2014 08:00 ET

GVIC Receives CRA Notice of Reassessment

VANCOUVER, BRITISH COLUMBIA--(Marketwired - Nov. 6, 2014) - GVIC Communications Corp. ("GVIC" or the "Company") (TSX:GCT) received from the Canada Revenue Agency ("CRA"), tax notices of reassessment relating to the taxation years ended December 31, 2008 through 2013 inclusive. The potential for these reassessments has been anticipated for over a year and has been previously disclosed. The reassessments deny the application of non-capital losses, capital losses and scientific research & experimental development ("SR&ED") tax credits claimed for those years.

According to the notices of reassessment received, taxable income for the period 2008 to 2013 will increase in the amount of $122.8 million. In addition, the CRA proposes to deny unused SR&ED tax credits of $25.4 million and unused investment tax credits of $5.9 million. As a result of the increases in taxable income, additional taxes payable for the reassessed years, including interest and penalties would be approximately $45 million. GVIC is currently reviewing the reassessments to determine their accuracy.

The Company will file a notice of objection to the CRA and if necessary a notice of appeal to the Tax Court of Canada. To object to the reassessments, GVIC will be required to make a deposit of 50% of the reassessed amounts.

The Company and its counsel believe that the filing positions adopted are appropriate and in accordance with the law. GVIC intends to vigorously defend such positions. The Company has not recorded a liability in its consolidated financial statements for the reassessed taxes payable described above, nor has it adjusted the carrying value of deferred tax assets recorded for unused carry-forward amounts. If GVIC is successful in defending its positions, deposits made plus applicable interest will be refunded. There is no assurance that the Company's objections and appeals will be successful. If the CRA is successful, GVIC will be required to pay the balance of taxes owing plus applicable interest.

Shares in GVIC are traded on the Toronto Stock Exchange under the symbol GCT.

About the Company: GVIC Communications Corp. is an information communications company focused on the provision of primary and essential information and related services through print, electronic and online media.

Forward-Looking Statements

This news release contains forward-looking statements that relate to, among other things, the Company's objectives, goals, strategies, intentions, plans, beliefs, expectations and estimates. These forward-looking statements include statements relating to the expected amount of the tax reassessment and GVIC's intention to pay a deposit and appeal such reassessment. These forward looking statements are subject to risks, uncertainties and other factors which may cause results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements, and undue reliance should not be placed on such statements.

Important factors that could cause actual results to differ materially from these expectations are listed in the Company's Annual Information Form under the heading "Risk Factors" and in the Company's MD&A under the heading "Business Environment and Risks", many of which are out of the Company's control. These factors include, but are not limited to, tax risk, financing risk and general market conditions.

The forward-looking statements made in this news release relate only to events or information as of the date on which the statements are made. Except as required by law, the Company undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, after the date on which the statements are made or to reflect the occurrence of unanticipated events.

Contact Information

  • GVIC Communications Corp.
    Mr. Orest Smysnuik
    Chief Financial Officer