Sunday

21st Jan 2018

LuxLeaks: Grand Duchy puts limits on transparency

  • Luxembourg is pressing charges against reporters and others for disclosing how the state helps big firms avoid paying taxes (Photo: Brett Jordan)

MEPs looking into state sanctioned corporate tax avoidance praised Luxembourg’s finance minister on Monday, despite his refusal to say how many tax rulings the Grand Duchy has issued.

The micro-state gained notoriety last year following media disclosure of some 500 government-backed rulings, also known as comfort letters, which exonerated big companies from paying billions in taxes at the height of the EU’s economic crisis.

Thank you for reading EUobserver!

Subscribe now for a 30 day free trial.

  1. €150 per year
  2. or €15 per month
  3. Cancel anytime

EUobserver is an independent, not-for-profit news organization that publishes daily news reports, analysis, and investigations from Brussels and the EU member states. We are an indispensable news source for anyone who wants to know what is going on in the EU.

We are mainly funded by advertising and subscription revenues. As advertising revenues are falling fast, we depend on subscription revenues to support our journalism.

For group, corporate or student subscriptions, please contact us. See also our full Terms of Use.

If you already have an account click here to login.

The polemic spurred the European Parliament to set up a special committee in February with a six-month mandate to probe it and similar schemes in Europe.

On its second leg of a six-member state tour, a small delegation of MEPs from the committee met Luxembourg’s finance minister Pierre Gramegna on Monday (18 May).

French centre-right MEP Alain Lamassoure, who heads the special committee, told reporters at a press conference after the two-hour meeting that “there is an obvious change of mindset” in Luxembourg.

Lamassoure said it had demonstrated a “desire to support transparency” and noted that the “real scandal” is that there are 28 different tax laws in Europe.

But when asked by a reporter to reveal how many tax rulings the Duchy had issued over the past 10 years, Luxembourg’s finance minister Pierre Gramegna stonewalled.

“The figure that you are asking for is confidential, so I cannot give it,” he said.

Instead, Gramegna said Luxembourg had handed over all its tax rulings from 2010 to 2012 to EU competition commissioner Margrethe Vestager, in part, because all member states had been asked to do the same.

The LuxLeaks scandal covered the period 2002 to 2010 and showed how 340 multinationals avoided paying billions thanks to secret deals with the Grand Duchy.

Gramegna said Luxembourg has since initiated tax reforms that he hoped would help create a new European and global transparency culture.

Last November, the government vowed to abolished bank secrecy. In January, it agreed to introduce an automatic exchange of information with other countries despite years of resistance to the idea.

“Luxembourg is not part of the problem, it is part of the solution,” said Gramegna.

Meanwhile, a judge in late April filed criminal charges against the lead journalist, French reporter Edouard Perrin, who first revealed the extent of the state-sanctioned secret tax schemes in 2012.

Perrin and other reporters from the International Consortium of Investigative Journalists were invited to discuss their work at the special committee in Brussels earlier this month.

"Legal charges are brought against people who reveal certain practices, not against those who are involved in these dealings,” Perrin told MEPs in the committee.

The International Consortium of Joualists’ director Gerard Ryle said Perrin’s reporting on Luxembourg’s secretive tax practices helped trigger "official European inquiries and opening significant, widespread debate about the fairness of tax policies".

The charges brought against Perrin and others were not mentioned at Monday's press conference.

Article updated at 21:35 on 18 May. Article had incorrectly stated the government filed charges against Perrin.

Opinion

Involving people in EU governance

The standard of EU governance should be a reason for citizens to want to stay in the Union, rather than an excuse to leave.

News in Brief

  1. Germany confirms attendance at air quality summit
  2. Nearly half of 'fixed' Dieselgate cars show problems
  3. YouTube, Twitter, Facebook up hate speech deletion
  4. UK mulls bridge to France
  5. German far-right float anti-asylum bill
  6. EU Parliament to investigate glyphosate-decision process
  7. 'Mutagenesis' falls outside EU's GMO rules, says EU top lawyer
  8. Decision on Polish MEP's Nazi-era slur postponed

Stakeholders' Highlights

  1. Nordic Council of MinistersNordic Solutions for Sustainable Cities: New Grants Awarded for Branding Projects
  2. Mission of China to the EUTrade Between China, Belt and Road Countries up 15%
  3. Nordic Council of MinistersOresund Inspires Other EU Border Regions to Work Together to Generate Growth
  4. Mission of China to the EUTrade Between China, Belt and Road Countries up 15%
  5. AJC Transatlantic InstituteAJC Calls on EU to Sanction Iran’s Revolutionary Guards, Expel Ambassadors
  6. Dialogue PlatformRoundtable on "Political Islam, Civil Islam and The West" 31 January
  7. ILGA EuropeFreedom of Movement and Same-Sex Couples in Romania – Case Update!
  8. EU2017EEEstonia Completes First EU Presidency, Introduced New Topics to the Agenda
  9. Bio-Based IndustriesLeading the Transition Towards a Post-Petroleum Society
  10. ACCAWelcomes the Start of the New Bulgarian Presidency
  11. Mission of China to the EUPremier Li and President Tusk Stress Importance of Ties at ASEM Summit
  12. EU2017EEVAT on Electronic Commerce: New Rules Adopted

Latest News

  1. Middle East, Messi and missing MEPs on the agenda This WEEK
  2. Instagram and Google Plus join EU anti-hate speech drive
  3. EU wants 'entrepreneurship' in education systems
  4. UK loses EU satellite centre to Spain
  5. Pay into EU budget for market access, Macron tells May
  6. Ethiopian regime to get EU migrants' names
  7. EU to lend Greece up to €7bn more next week
  8. Nato prepares to take in Macedonia