Some Canadian companies have used Luxembourg as a “tax haven,” over the past decade to avoid paying domestic taxes on billions of dollars in profits, a Quebec research institute says.
A recently published paper by Montreal-based IRIS found that 59 Canadian companies—33 of which were headquartered in Quebec—transferred $119.8 billion in net profits to Luxembourg between 2011 and 2021 to take advantage of its low tax rate. During the 10-year period studied, transferring of profits rose an average of 20 percent annually.
Study co-author and IRIS researcher Colin Pratte said Luxembourg was chosen for the company’s research project because it makes financial information publicly available, unlike other tax havens. Pratte told The Canadian Press that the study couldn’t capture the entire tax avoidance picture because it deals with only one tax haven. He also said they may not have received a complete list of Canadian companies operating there.