The Luxembourg ministry of Finance comments on the latest publications by the ICIJ
The ministry of Finance acknowledges the publication by the International Consortium of Investigative Journalists (ICIJ) and affiliated medias of a further series of advance tax decisions (“rulings”) issued by the Luxembourg tax administration. As with previous publications (“Luxleaks”), the way in which these documents were acquired is highly questionable.
The now released documents do not fundamentally differ from those already published a few weeks ago.
As previously stated on numerous occasions, Luxembourg agrees that the legitimacy of certain mechanisms, which are compliant with international and national law, can be put in doubt from an ethical point of view. Currently, the interaction of the tax regimes of multiple countries, within the current international framework, together with the application of non-double taxation treaties, can lead to a significant reduction of a company’s tax burden, or even no taxation at all. The analysis of this situation calls for a broad perspective, and cannot be limited to one country’s regulatory framework. The international community as a whole faces a responsibility to adapt international regulations to current realities. Luxembourg actively supports the corresponding European and international initiatives, including with regard to the use of tax rulings.
Rulings issued by the Luxembourg tax authority are neither contracts nor mutual agreements. They are unilateral decisions by the tax authority. They are not, and never have been, secret. In fact, Luxembourg, upon request, exchanges information on rulings with other countries, as foreseen by non-double taxation treaties as well as by directives and agreements concerning administrative cooperation and mutual assistance in tax matters. Luxembourg supports the initiative of the EU Commission to quickly present a draft directive aimed at introducing a mandatory automatic exchange of information on tax rulings between the competent authorities of the EU member states.