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Quebec tax agency to examine Bombardier’s finances

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Core Tip:QUEBEC — Quebecs finance minister says he understands Bombardier Inc. pays its taxes according to Quebec and Ca

QUEBEC — Quebecs finance minister says he understands Bombardier Inc. pays its taxes according to Quebec and Canadian laws and that we receive what we should receive.

However, the finance minister, Carlos Leitao, questions whether or not the company is using a European tax haven to avoid paying provincial taxes. Leitao has asked Revenu Quebec to look into the accusation.

He made the comments after confidential documents were disclosed by the International Consortium of Investigative Journalists. The documents have information about Bombardier and other firms.

Reports say that according to the documents Bombardier transferred hundreds of millions of dollars to Luxembourg to save taxes.

They say the Montreal-based aircraft and railway car manufacturer used a complex structure to transfer funds to subsidiaries in Luxembourg in order to legally reduce its Canadian tax bill.

Leitao said the strategy is used by many large multinationals, including Disney and Skype, and deals exclusively with taxes owed in Europe.

Nonetheless, Leitao said hes asked the provinces tax agency to examine the situation.

Isabelle Rondeau of Bombardier said the company follows all tax laws.

Bombardiers worldwide corporate structure abides by all applicable laws, including tax laws, said an email from Rondeau, communications director for the company.

Bombardier is one of Quebecs largest companies and a large beneficiary of government financial support.

The Fraser Institute last year said Bombardier only trailed Pratt & Whitney Canada in securing federal assistance, obtaining more than $1 billion between 1961 and 2012.

Quebec has also regularly helped, providing support for its new CSeries commercial jet. Through the Caisse de depot and Investissement Quebec, it injected $450 million this year in the McInnis Cement project controlled by the Beaudoin-Bombardier family.

Bombardier CEO Pierre Beaudoin recently expressed displeasure with Leitaos decision to reduce corporate tax credits by 20 per cent. He suggested the move might influence the investment decisions of the company.


 
 
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