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Tax avoidance: Canadian companies transferred $120B to Luxembourg, study says
(www.winnipegfreepress.com)
this post was submitted on 03 Nov 2023
92 points (97.9% liked)
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I worked at a Canadian company that did this. We were very profitable.
Got bought by a company in the EU. The EU HQ starts charging us really high consulting fees or something like that to run the business, which wiped out all the profit so it could be paid in the more favorable EU location.
However it was done was completely legal
I have no idea how corporate taxes work.
Wouldn't taxes need to be paid on those ridiculously high consultation fees? Or would those tax rates be way lower than taxes on profit?
I suspect that since it's the same company, it's just a line item of how someone spent their time in the EU advising us here, but it's not paid like hiring an outside consultant who you then have to pay gst/pst on their services. So no tax other than on the other side?
But i'm just guessing, I don't know the whole details, maybe it is just lower tax