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BackDuring a press conference, which took place this Wednesday, Commission President Juncker for the first time publicly commented on the so-called “Luxembourg Leaks”. He insisted on cracking down on tax fraud and tax evasion in the EU and announced that the Commissioner for Economic and Financial Affairs, Taxation and Customs, Pierre Moscovici, had been instructed with drawing up a Directive on Automatic Data Exchange, i.e. the automatic exchange of financial information, in respect of those Member States which would offer large corporations favourable tax deals.
Last week, the “Lux Leaks” were among the main topics in Brussels. Secret transactions came to light, which once again named and shamed Luxembourg as a tax oasis. Over the past decades, multinational corporations such as Amazon or Pepsi were offered preferential tax treatment, enabling them to reduce their tax burden by alternative routes via Luxembourg. For the main part of this period, Juncker had been both Finance Minister and Head of Government of the Grand Duchy and thus came under fire from all sides.
During a press conference on Wednesday and later before the European Parliament, Juncker for the first time commented on the accusations that during his period in office it had been made possible for large corporations to engage in tax evasion. He began by explaining that he would assume political responsibility for everything that had happened in his country; however, under no circumstances had it been his intention to organise tax evasion in the EU. In his capacity as the new President of the European Commission he intended to take a tough stance against tax evasion by multinational companies. The plan is to establish a future automatic information and data exchange between EU Member States concerning fiscal agreements by large corporations. Pierre Moscovici, the competent Commissioner for fiscal policy, will prepare a relevant Directive. Juncker would also promote broadening this data exchange at the forthcoming G20 Summit. He affirmed that there would be no conflict of interest between his previous position as Luxembourg’s Head of Government and Finance Minister and his current role as Commission President. Juncker promised Margrethe Vestager, EU Commissioner for Competition, greatest possible autonomy with regard to the investigations; he would not interfere in matters concerning his native country.
In the EU, not only Luxembourg is well-known for providing multinational companies with tax incentives; other Member States such as Ireland and the Netherlands are extremely generous to large corporations. They allow multinational countries to benefit from tax avoidance schemes, also known as tax rulings. Juncker defended such tax avoidance schemes in principle. These legal fiscal agreements would be applied in many Member States; admittedly more frequently in Luxembourg.
The legal methods, multinationals use to avoid taxes, have been well known factors for years. AK and ÖGB have drawn attention to these irregularities on several occasions.
During a press conference on Wednesday and later before the European Parliament, Juncker for the first time commented on the accusations that during his period in office it had been made possible for large corporations to engage in tax evasion. He began by explaining that he would assume political responsibility for everything that had happened in his country; however, under no circumstances had it been his intention to organise tax evasion in the EU. In his capacity as the new President of the European Commission he intended to take a tough stance against tax evasion by multinational companies. The plan is to establish a future automatic information and data exchange between EU Member States concerning fiscal agreements by large corporations. Pierre Moscovici, the competent Commissioner for fiscal policy, will prepare a relevant Directive. Juncker would also promote broadening this data exchange at the forthcoming G20 Summit. He affirmed that there would be no conflict of interest between his previous position as Luxembourg’s Head of Government and Finance Minister and his current role as Commission President. Juncker promised Margrethe Vestager, EU Commissioner for Competition, greatest possible autonomy with regard to the investigations; he would not interfere in matters concerning his native country.
In the EU, not only Luxembourg is well-known for providing multinational companies with tax incentives; other Member States such as Ireland and the Netherlands are extremely generous to large corporations. They allow multinational countries to benefit from tax avoidance schemes, also known as tax rulings. Juncker defended such tax avoidance schemes in principle. These legal fiscal agreements would be applied in many Member States; admittedly more frequently in Luxembourg.
The legal methods, multinationals use to avoid taxes, have been well known factors for years. AK and ÖGB have drawn attention to these irregularities on several occasions.