Thursday

7th Jul 2022

Luxembourg caves in to EU tax listing demands

  • Luxembourg agrees to give the EU commission tax listings (Photo: Cesar Poyatos)

Luxembourg on Thursday (18 December) caved in to pressure to give EU-anti trust regulators the details of tax deal schemes it has with multinational companies.

Prime minister Xavier Bettel said he would comply with the demands - after suing the European Commission over the issue - because other member states are also now required to provide similar details on the discounted tax deals.

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“If everybody’s in the same boat, this makes it possible for us to take away the trial we had with the commission,” he told reporters in Brussels.

Aside from Luxembourg, the commission had also previously requested an overview of tax rulings in Cyprus, Ireland, Malta, the Netherlands and the UK.

Other requests had also been made to other member states on their intellectual property taxation regimes known as "patent boxes".

But on Wednesday, the Brussels-executive decided to extend its information requests to all 28 member states with firms dating from 2010 until 2013.

“We insisted that it should be a global level field and we are now very happy that now this level field has been reached,” said Bettel.

Pressure had also intensified on the Grand Duchy to come clean in the wake of leaked documents in November showcasing how Luxembourg’s government had manipulated tax rules to attract companies from around the world.

The 28,000 documents disclosed that some of the companies were paying less than 1 percent tax, draining national coffers elsewhere.

The disclosures are also politically sensitive because many of the tax avoidance deals were struck while EU commission president Jean-Claude Juncker was Luxembourg’s prime minister and finance minister.

The commission, for its part, had already launched probes into whether US retailer Amazon and a unit of Italian carmaker Fiat were receiving unfair state aid by exploiting the Grand Duchy’s tax loopholes.

EU’s competition commissioner Margrethe Vestager said she was pleased to hear Bettel’s government now intends to give the commission information on its tax rulings practice and patent box schemes.

“They will now provide the Commission with all the requested information outstanding,” she said.

Luxembourg had initially refused to give the commission information on its patent box scheme, including the details of the 100 largest companies falling under the regime.

They had also refused to give specific details on tax rulings for the years 2010, 2011, and 2012.

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