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Fresh Luxembourg leaks increase pressure on Jean-Claude Juncker

New documents have been leaked linking the Luxembourgian government with mass tax avoidance. Toda...
Newstalk
Newstalk

15.45 10 Dec 2014


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Fresh Luxembourg leaks increas...

Fresh Luxembourg leaks increase pressure on Jean-Claude Juncker

Newstalk
Newstalk

15.45 10 Dec 2014


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New documents have been leaked linking the Luxembourgian government with mass tax avoidance. Today's revelations name more major international companies who appear to have negotiated advanced tax deals with the country.

Walt Disney, Skype and Koch Industries - the United State's second largest privately owned business - are among the 34 companies mentioned in the new leak.

The European Commission's recently-appointed President, Jean-Claude Juncker was the prime minister of Luxembourg for 18 years, between 1995 and 2013 - meaning that he was leading the country when the alleged tax agreements were reached.

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Since the original LuxLeaks were published Mr Juncker has taken responsibility for the tax deals reached under his premiership but also pointed out: "I am not the architect of the Luxembourg model."

He claimed that there was no Luxembourg model - and that the country was just competing to attract international businesses.

In 2005, while Mr Juncker was prime minister and finance minister, he talked about Skype's business in the country, saying: "Skype will remain based here … this is partly because of the favourable fiscal environment we’ve created here in Luxembourg."

He has attempted to take the focus of the debate away from Luxembourg's agreements, and to move it toward broader issues regarding the lack of transparency and coordination on tax policies across the EU.

He claimed: "When it comes to the application of different tax rules, often diametrically opposed, that can lead to results that are not in-line with ethical and moral standards.”

Fallout

Since the documents were made public, 76 MEPs put forward a motion of censure against Mr Juncker because of the allegations. Last week the finance ministers from Germany, France and Italy wrote to the EU Commissioner for economic affairs, Pierre Moscovic, calling for a clampdown on tax avoidance in Luxembourg.

This Monday, the chair of the UK's public accounts committee, Margaret Hodge publicly questioned whether Mr Juncker, "is fit to be the president of the European commission."

The EU’s Competition Commissioner, Margrethe Vestager, has said that the European Commission has taken note of the LuxLeaks documents and that they could be used as evidence in a future case against Luxembourg, if they are suspected of breaching EU regulations.

She added that the issued raised in the report would not be investigated until the Commission's current investigations have been completed - this includes the EU's examination of Apple's tax payments in Ireland.  

The new documents were received by the International Consortium of Investigative Journalists (ICIJ) soon after it published the original LuxLeaks documents. The first report suggested that 340+ companies were involved in industrial scale tax avoidance in the small EU state.


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