Chinese hotpot chain sues consulting firm after $250K tax penalty, raid

A Chinese hotpot chain with 22 North American locations is suing a consulting company after it was fined $250,000 and raided by the Canada Revenue Agency (CRA).

Liuyishou International Management Company (Canada) Ltd., the company behind Liuyishou Hot Pot, is seeking compensation from Vancouver-based Pinmo Creative Technology Ltd. and an individual named Scott Meng.

According to a civil lawsuit filed in B.C. Supreme Court on April 26, Liuyishou hired Pinmo in 2020 to help it apply for the Scientific Research and Experimental Development tax credit (SR&ED tax credit) for the 2019 fiscal year.

Liuyishou claims Meng either acted as Pinmo’s directing mind or Pinmo was Meng’s alter ego.

Liuyishou was founded

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