Monday

18th Feb 2019

Juncker produces missing page on tax rulings

  • The report on tax rulings was published when Juncker was Luxembourg's prime minister (Photo: ec.europa.eu)

Two weeks after telling MEPs he didn’t know about a missing page in a report on Luxembourg tax rulings, European Commission president Jean-Claude Juncker sent it on Wednesday (30 September) to an MEP.

The page was redacted from a 240-page "report on fiscal fraud in Luxembourg" written in 1996 by Jeannot Krecke, who was at the time vice-president of the Luxembourg Socialist Workers’ Party (LSWP).

Read and decide

Join EUobserver today

Support quality EU news

Get instant access to all articles — and 18 year's of archives. 30 days free trial.

... or join as a group

Juncker, a political opponent, had been appointed prime minister a few months before. He remained at this position until 2013.

Considered at the time as too sensitive for public disclosure, the page dealt with tax rulings, the practice which allows multinationals to avoid tax in other countries.

On 17 September, speaking to MEPs on a special tax committee set up after the “LuxLeaks” revelations, Juncker said he had no memory of the page.

"I don’t have that documentation in my cellar and I’m also not going to go in my cellar with you to go and look for it," he said.

But a member of the committee, German MEP Fabio De Masi, from the United Left, asked Juncker to produce the missing page.

The Commission president then sent it to him on Wednesday.

"The practice of [tax] ruling doesn’t exist in our fiscal legislation", the report says in the redacted page, which EUobserver has seen.

It admits that with the practice, Luxembourg was "entering fiscal competition with other European countries" and warns that "the informal rules applied" may not be "consistent with the government's policies".

In a Europe where fiscal competitiveness is the rule, the negative effect of offshoring is enforced”, the page adds, citing the Netherlands as a "pilot country in the practice of 'ruling’.”

According to the European Parliament, a tax ruling is "a written statement issued by a tax authority, setting out in advance how a corporation's tax will be calculated and which tax provisions will be used."

The practice is "legal but may, under the EU rules, involve state aid and thus be subject to scrutiny from the European Commission," the Parliament's definition says.

The scope of tax rulings, which benefited companies like Apple, Ikea, Amazon, Microsoft, and Deutsche Bank, was revealed by media in 2014 in the so-called LuxLeaks affair.

"The missing page, while not revolutionary, makes clear that the Luxembourg system of attracting companies' profits via a generous ruling practice has been in place since at least the 90s," De Masi said on Wednesday.

"The government, with Juncker at the top, had been warned about the consequences, and did nothing to prevent the excesses from going on," he added.

De Masi demanded that the commission, with Juncker at its head, should "get serious about tax transparency”.

“Instead of hiding behind yet another impact assessment, we need full public country-by-country reporting for all multinationals as soon as possible. It is working well for banks and will do no harm to other companies either. Juncker, however, still refuses to commit to this personally”.

Juncker denies role in tax scams

EU Commission chief Juncker says he had nothing to do with Luxembourg's sweetheart tax deals in his time as PM of the microstate.

Opinion

Tax transparency: Keeping the public in the dark?

EU member states agreed this week to exchange information on tax rulings but not to make it public. A basic measure of transparency would allow an informed public debate on tax policy.

News in Brief

  1. Visegrad countries meeting with Israel called off
  2. EU ministers call climate change 'direct and existential threat'
  3. Seven MPs leave Britain's Labour Party
  4. Czech PM: May's EU elections 'most important ever'
  5. 'History will judge us': May tells MPs on Brexit
  6. Trump warns EU on release of Islamist fighters
  7. Venezuela expels 'conspiratorial' MEPs
  8. Holocaust dispute upsets Israel's EU lobbying

Opinion

Eastern Europe Matters

The foreign ministers of Sweden, Poland and the Czech Republic reflect on 10 years of the Eastern Partnership with Armenia, Azerbaijan, Belarus, Georgia, Moldova and Ukraine.

Stakeholders' Highlights

  1. Nordic Council of MinistersMilestone for Nordic-Baltic e-ID
  2. Counter BalanceEU bank urged to free itself from fossil fuels and take climate leadership
  3. Intercultural Dialogue PlatformRoundtable: Muslim Heresy and the Politics of Human Rights, Dr. Matthew J. Nelson
  4. Platform for Peace and JusticeTurkey suffering from the lack of the rule of law
  5. UNESDASoft Drinks Europe welcomes Tim Brett as its new president
  6. Nordic Council of MinistersNordic ministers take the lead in combatting climate change
  7. Counter BalanceEuropean Parliament takes incoherent steps on climate in future EU investments
  8. International Partnership For Human RightsKyrgyz authorities have to immediately release human rights defender Azimjon Askarov
  9. Nordic Council of MinistersSeminar on disability and user involvement
  10. Nordic Council of MinistersInternational appetite for Nordic food policies
  11. Nordic Council of MinistersNew Nordic Innovation House in Hong Kong
  12. Nordic Council of MinistersNordic Region has chance to become world leader when it comes to start-ups

Latest News

  1. Italian populists could be second biggest force in EU parliament
  2. Merkel defends Russia ties, ridicules Trump on cars
  3. British MPs condemn Facebook CEO's misrule
  4. EU's chance to step up on Hungary and Poland
  5. ESA pushback against new EU space agency plan
  6. Sluggish procedure against Hungary back on table
  7. Could Finnish presidency fix labour-chain abuse?
  8. Brexit and trip to Egypt for Arab League This WEEK

Join EUobserver

Support quality EU news

Join us