Thursday

17th Jan 2019

Luxembourg not a tax haven, claims PM

Luxembourg continues to refute any notion that it is a tax haven, despite widespread evidence of dubious schemes that it cuts global tax bills for big firms.

"We were never a tax haven," Luxembourg's prime minister, Xavier Bettel, told EUobserver on Tuesday (27 June).

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

Bettel's comments follow a grilling of Luxembourg's former prime minister and current European Commission president, Jean-Claude Juncker. Juncker in late May told the European Parliament that he was unable to explain why the Grand Duchy "didn't want to remove tax secrecy."

But Bettel, who was fielding a wide range of questions from reporters at an event hosted by the European Investment Bank in Luxembourg, defended the country's tax policies by saying it was one of the first places to push transparency and the exchange of tax rulings with other member states.

"It is important for me that we have common rules and Luxembourg was one of the first one for transparency," he said.

Luxembourg was rocked by scandal following media revelations in late 2014 that exposed how nearly 340 companies secured secret deals that shaved billions of euros from taxes, which were due to be paid elsewhere.

The revelations ushered in a raft of new EU and national legislation to increase tax transparency and weed out abuse.

The scandal also triggered a probe by the European Parliament, which slammed Luxembourg for allowing corporations to dodge "tax that could have been used to build schools, hospitals or pay down national debt."

A report by the Brussels-based NGO, Eurodad, had also revealed last December that Luxembourg had in fact increased the number of so-called tax rulings in the wake of the 2014 media revelations by some 50 percent.

The issue saw former PricewaterhouseCoopers (PwC) employee Antoine Deltour face prison time for leaking the secret rules to the media, posing larger questions on whistleblower protection laws.

But Bettel maintained that his country was fully compliant with tax standards and had not committed a crime.

"There are over 20 countries in Europe doing [tax] rulings," he noted, echoing a similar refrain to his predecessor, Juncker.

Luxembourg, under Juncker's decade-long leadership of the country, had also repeatedly blocked the rolling back of aggressive tax planning schemes throughout the EU, according to a cache of German cables leaked earlier this year.

Bettel also opposes any pan-EU taxation system and refuses to impose any sort of tax on financial transactions.

The financial transaction tax, also known as the FTT, aims to raise money for the public good by imposing a 0.1 percent tax on shares and bonds, and 0.01 percent on derivative products.

"I am fully against and I will block that," said Bettel. But he noted that other member states are free to move ahead on the file as part of a two-speed Europe.

He also added that people in Luxembourg should not have to pay more tax only "because other countries were not responsible with public finances."

MEPs grill Juncker on tax scandals

EU commission head made new concessions on tax justice, but denied responsibility for Luxembourg tax-dodging schemes when he led the country.

Investigation

Inside the Code of Conduct, the EU's most secretive group

The informal group of national officials that is in charge of checking EU countries' tax laws is now working on the first EU blacklist of tax havens, amid critiques over its lack of transparency and accountability.

Airbnb too 'different' to pay EU tax

US home rental firm said its “model is unique” because most of the money stays in pockets of local people, as France and Germany prepare EU tax crackdown.

Opinion

The EU's tax haven blacklist - impressive or impotent?

One year ago, the European Union published its first ever blacklist of tax havens. It is crucial that EU governments help end the era of tax havens to ensure the billions currently hidden from public coffers.

News in Brief

  1. Another referendum 'would take a year', Downing St says
  2. 82-year old Berlusconi to run in EU elections
  3. EU parliament votes to triple funds for democracy promotion
  4. EU parliament backs linking budget payments to rule of law
  5. Verhofstadt voted for Draghi amendment 'by mistake'
  6. 'Plan B' Brexit vote in UK parliament set for 29 January
  7. Verhofstadt wanted Draghi out of G30 group
  8. Putin heads to Serbia amid warnings against West

Stakeholders' Highlights

  1. International Partnership For Human RightsKyrgyz authorities have to immediately release human rights defender Azimjon Askarov
  2. Nordic Council of MinistersSeminar on disability and user involvement
  3. Nordic Council of MinistersInternational appetite for Nordic food policies
  4. Nordic Council of MinistersNew Nordic Innovation House in Hong Kong
  5. Nordic Council of MinistersNordic Region has chance to become world leader when it comes to start-ups
  6. Nordic Council of MinistersTheresa May: “We will not be turning our backs on the Nordic region”
  7. International Partnership for Human RightsOpen letter to Emmanuel Macron ahead of Uzbek president's visit
  8. International Partnership for Human RightsRaising key human rights concerns during visit of Turkmenistan's foreign minister
  9. Nordic Council of MinistersState of the Nordic Region presented in Brussels
  10. Nordic Council of MinistersThe vital bioeconomy. New issue of “Sustainable Growth the Nordic Way” out now
  11. Nordic Council of MinistersThe Nordic gender effect goes international
  12. Nordic Council of MinistersPaula Lehtomaki from Finland elected as the Council's first female Secretary General

Latest News

  1. Brexit delay 'reasonable', as May tries cross-party talks
  2. MEPs allow Draghi's membership of secretive bank group
  3. EU parliament backs Morocco deal despite row
  4. Barnier open to 'future relations' talks if UK red lines shift
  5. German spies to monitor far-right AfD party
  6. On Morocco, will the EU ignore its own court?
  7. UK parliament rejects May's Brexit deal in historic defeat
  8. EU suggests majority vote on digital tax by 2025

Join EUobserver

Support quality EU news

Join us