Danish mobile company 3 pays no taxes: report
LuxLeaks revelation shows that the company 3, which has over one million customers in Denmark, hasn’t paid Danish taxes. The company insists it has followed “the ppropriate tax rules” and defends its investments in Denmark.
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The telecommunications company 3, which has earned over 1.5 billion kroner off of its more than one million Danish customers over the past five years, hasn’t paid a single krone in Danish taxes, Politiken newspaper reported on Tuesday.
According to Politiken’s report, 3’s parent company, the Hong Kong-based Hutchison Whampoa, has been using Luxembourg as a tax haven to avoid Danish taxes.
By using companies in Luxembourg, 3 and other mobile companies were able to pay tax rates as low as 0.02 percent on their interest income. The Luxembourg-based company that owns 3 had 2.1 billion kroner in profits in 2013 but paid only 5.2 percent in taxes due to its specially-brokered deals.
See also: Danish firms in ‘fairyland’ Luxembourg tax deals
Politiken’s revelations stem from documents leaked from the world’s second-largest accounting firm PwC to the International Consortium of Investigative Journalists (ICIJ). Those documents, dubbed LuxLeaks, exposed how multinational corporations have been using Luxembourg as a “magical fairyland” allowing them to avoid paying full taxes through a complex structure that allowed them to funnel profits to Luxembourg from high-tax countries.
One of the leaks details how Luxembourg helped the five capital funds that overtook telecommunications company TDC actively avoid paying Danish taxes.
After being hammered by angry customers on its Facebook page on Tuesday, 3 issued a press release stating that it “abides by the appropriate tax rules in Denmark”. The company also said it has invested heavily in Denmark’s mobile network infrastructure.
“Since the establishment of 3 back in 2003, the company has made massive investments in Denmark’s infrastructure in the form of nationwide 3G and 4G networks. The investments have been to the order of five billion kroner and on top of the network the company has also invested massively in marketing, employees and shops, etc. Put together, this created a very large deficit that affected the company in its first years. This deficit has been offset by the revenues 3 has brought in over recent years,” the press release read.
The European Commission’s competition commissioner, Denmark’s Margrethe Vestager, has vowed that her team would dig deeper into all of the LuxLeaks documents.
