Thursday

30th Mar 2023

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.

Read and decide

Join EUobserver today

Become an expert on Europe

Get instant access to all articles — and 20 years of archives. 14-day free trial.

... or subscribe as a group

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.

Opinion

Why can't we stop marches glorifying Nazism on EU streets?

Every year, neo-Nazis come together to pay tribute to Nazi war criminals and their collaborators, from Benito Mussolini to Rudolf Hess, Ante Pavelić, Hristo Lukov, and of course Adolf Hitler, in events that have become rituals on the extreme-right calendar.

Latest News

  1. The overlooked 'crimes against children' ICC arrest warrant
  2. EU approves 2035 phaseout of polluting cars and vans
  3. New measures to shield the EU against money laundering
  4. What does China really want? Perhaps we could try asking
  5. Dear EU, the science is clear: burning wood for energy is bad
  6. Biden's 'democracy summit' poses questions for EU identity
  7. Finnish elections and Hungary's Nato vote in focus This WEEK
  8. EU's new critical raw materials act could be a recipe for conflict

Stakeholders' Highlights

  1. InformaConnecting Expert Industry-Leaders, Top Suppliers, and Inquiring Buyers all in one space - visit Battery Show Europe.
  2. EFBWWEFBWW and FIEC do not agree to any exemptions to mandatory prior notifications in construction
  3. Nordic Council of MinistersNordic and Baltic ways to prevent gender-based violence
  4. Nordic Council of MinistersCSW67: Economic gender equality now! Nordic ways to close the pension gap
  5. Nordic Council of MinistersCSW67: Pushing back the push-back - Nordic solutions to online gender-based violence
  6. Nordic Council of MinistersCSW67: The Nordics are ready to push for gender equality

Stakeholders' Highlights

  1. Azerbaijan Embassy9th Southern Gas Corridor Advisory Council Ministerial Meeting and 1st Green Energy Advisory Council Ministerial Meeting
  2. EFBWWEU Social Dialogue review – publication of the European Commission package and joint statement of ETUFs
  3. Oxfam InternationalPan Africa Program Progress Report 2022 - Post Covid and Beyond
  4. WWFWWF Living Planet Report
  5. Europan Patent OfficeHydrogen patents for a clean energy future: A global trend analysis of innovation along hydrogen value chains

Join EUobserver

Support quality EU news

Join us