Luxembourg says disclosing tax rulings to other states
(Reuters) – Luxembourg is giving details of its tax deals with foreign firms to governments that ask for them, its finance ministry said on Tuesday, addressing critics of its role in helping companies avoid taxes on a global scale.
In a statement issued after a Belgian minister revealed he was expecting data next month, the ministry said it had always been willing to share such information, despite a current court battle with the European Union over the grand duchy’s refusal to release tax files to EU antitrust investigators.
“The rulings issued by the Luxembourg tax authorities are not, and have never been, secret,” it said. However, a finance ministry spokesman said the Belgian handover would be the first on a large scale. And Luxembourg still rejected the demands of the EU competition agents, as they were not a tax authority.
International criticism of the tiny state’s tax practices intensified a month ago with further media revelations based on leaked documents – dubbed “LuxLeaks”. Much has focused on Jean-Claude Juncker, the long-time prime minister of Luxembourg who took over as the EU’s chief executive last month.
The present government has said it expects further media reports questioning how Luxembourg cooperated with international accountants to approve arrangements that let companies channel profits through the country, paying its low tax rates rather than the higher rates in states where they did more business.
Juncker, who will take his formal oath of office before EU judges in Luxembourg on Wednesday a day after celebrating his 60th birthday, has defended the development of Luxembourg’s tax and finance specialties while he was in government but now promotes a plan for a common EU system to share tax information.
Having comfortably survived a censure motion brought by Eurosceptics in the European Parliament last month, Juncker’s position as president of the EU’s executive body, the Commission, does not appear to be in jeopardy at present.
EU SHARING PLAN
The Luxembourg finance ministry said its agreement to pass details of “tax rulings” affecting Belgian companies to the Belgian government reflected a long-standing policy:
“Luxembourg, spontaneously and upon request, exchanges information on rulings with other countries, as foreseen by non-double taxation treaties,” it said.
“These developments are in line with Luxembourg’s commitment to the initiative of the EU Commission to quickly present a draft directive aimed at introducing a mandatory automatic exchange of information on tax rulings.”
The ministry spokesman said it was also cooperating with an informal request from France for such information.
The European Commission launched investigations this year into whether U.S. retailer Amazon and a unit of Italian carmaker Fiat benefited from unfair state aid to the detriment of competitors as a result of tax arrangements in Luxembourg. It is also probing other firms in other countries.
