A Canadian government agency that invests civil servants’ pensions is among several multinationals outed by whistle blowers for using complex schemes to avoid paying taxes, Canada’s public broadcaster said Thursday.
While not illegal, the Public Sector Pension Investment Board used a “very aggressive way to avoid taxes,” according to a German tax official quoted by the Canadian Broadcasting Corporation (CBC).
The case flies in the face of Ottawa’s crackdown on tax avoidance schemes, both domestically and in partnership with other G20 nations.
The board avoided paying Can$20 million ($17.5 million) in German taxes, according to the CBC, which obtained a copy of the tax-avoidance plan from the International Consortium of Investigative Journalists (ICIJ).
The board held hundreds of millions of dollars in real estate in Germany between 2008 and 2013, and the CBC said it exploited a loophole in Germany’s land transfer tax by not including indirect holdings in the tax calculation.
It also managed to pay almost no taxes in Luxembourg by using a complex system of shell company transactions.
The pension group’s vice president Mark Boutet told AFP it had communicated its plan to German tax officials, who did not object.
He said that such arrangements were commonplace before Germany closed the loophole last year.
“We complied with all laws,” he said.
In its six-month investigation of 28,000 leaked documents, the ICIJ uncovered billions of dollars funneled through the European duchy of Luxembourg thanks to complex financial structures that allowed companies to slash their tax liabilities.
Household names such as Pepsi, IKEA and Deutsche Bank were among companies named by the consortium.
COMMENTS
Please let us know if you're having issues with commenting.