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Luxembourg struck 172 secret tax deals in the year after the LuxLeaks scandal first exposed the prevalence of agreements made between the government and multinational corporations, new research published today (7 December) has revealed.
The number of such deals between companies and governments across Europe has increased by almost 50% since the November 2014 investigation rocked the European Commission. Its president, Jean-Claude Juncker, was prime minister when many of the more than 300 tax rulings were made.
The two whistle-blowers and one of the journalists who exposed the scope of the practice and the profit-shifting of some multinationals are on trial in Luxembourg.
Belgium and Luxembourg made the largest amount of new “sweetheart deals” since the scandal, according to a report by the European Network on Debt and Development (Eurodad).
The NGO, a coalition of civil society organisations campaigning for greater tax transparency, analysed European Commission data for 18 countries.
LuxLeaks drove forward international and EU measures to force multinational companies to pay their fair share of tax, and not shift payments on profits made to jurisdictions with more favourable tax treatments.
Despite the controversy, Luxembourg made another 172 such deals in 2015, taking its total to 547 by the end of that year, according to the report.
In the EU as a whole, the number of deals kept increasing dramatically from 547 in 2013 to 972 in 2014, finally reaching 1,444 by the end of 2015. This is an increase of 160% in just two years, according to the report.
Luxembourg claims ‘leading role’ on tax transparency
Not every tax ruling counted in the report will be problematic. But it is impossible to judge the agreements because they are made in secret.
Luxembourg’s finance ministry told EurActiv.com, “We cannot confirm these allegations. On the contrary, I would like to underline that Luxembourg has played a leading role in enhancing transparency on tax rulings in Europe.”
When Luxembourg last held the rotating presidency of the EU, in the second half of 2015, it brokered agreement in the Council of Ministers on the automatic exchange of information on tax rulings between member state authorities.
Scheduled to begin in the second quarter of next year, it will allow EU governments to see each other’s tax deals with companies. Sources confirmed Luxembourg had helped push through an unprecedented agreement.
Defending his alleged part in the industrial scale, but legal, tax avoidance, a testy Juncker in September 2015 angrily told MEPs, “Call it EU leaks, not LuxLeaks!”
Tove Maria Ryding, tax justice coordinator of Eurodad and one of the report authors, said there were now more than 1,000 tax deals with multinationals in Europe.
She said, “It’s very surprising and deeply worrying to see that the amount of secret sweetheart deals is skyrocketing in Europe – as if the LuxLeaks scandal never happened.
“It’s even more surprising that one of the countries where we are seeing a dramatic increase is Luxembourg.”
>>Read: Whole story on EurActiv.
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