Thursday, November 6, 2014

Luxembourg biggest tax haven in EU (report)

PepsiCo, IKEA, FedEx and 340 other international companies use Luxembourg to slash their tax bills, according to new leaked documents.
The 1,000 square mile country sandwiched between France, Germany, and Belgium is the center of EU tax dodging, but not because it offers a low income tax rate like Ireland or Cyprus or no taxes at all, like Malta. Officially, Luxembourg has an income tax rate of 29 percent, which is relatively high among developed economies.

Companies flock to the Grand Duchy because they can save on taxes by channeling billions through Luxembourg, according a new report by the International Consortium of Investigative Journalists (ICIJ), which reviewed 28,000 pages of confidential documents.
Since Luxembourg is a member of the EU and a developed nation, money can flow in and out almost tax free.
American corporations have only had to pay 1.1 percent taxes or $1.04 billion on over $95 billion in overseas profits in 2012, according to data from the US Bureau of Economic Analysis.
More than 170 Fortune 500 companies have a Luxembourg subsidiary, according to Citizens for Tax Justice, a nonprofit research and advocacy group.
The EU has said they are already looking into the case, and will take "corrective actions" if necessary, spokesman of EU chief commissioner Jean-Claude Juncker told AFP following the leak.
The documents show PepsiCo used Luxembourg to channel at least $750 million to reduce its tax rate on the $1.4 billion purchase of JSC Lebedyansky, Russia’s largest juice maker. Shortly after, the subsidiary was moved to Bermuda.
Sweden’s furniture giant IKEA is using Luxembourg as a tax conduit by opening a Luxembourg holding company and a Luxembourg finance company, as well as a Liechtenstein foundation and a Swiss finance arm to “outsource” part of its financing operations. 

US-based global transport company FedEx, used Luxembourg to send money from Brazil, Mexico, and France to Hong Kong, tax free. Luxembourg only taxes 0.25 percent on non-dividend income, which left 99.75 percent in profits and earnings untaxed.
“A Luxembourg structure is a way of stripping income from whatever country it comes from,’’ Stephen Shay, a tax professor at Harvard Law School and former US Treasury Department tax official, told the ICIJ.
According to Shay, Luxembourg “combines enormous flexibility to set up tax reduction schemes, along with binding tax rulings that are unique. It’s like a magical fairyland.”
Luxembourg’s economy is heavily reliant on income taxes, which account for 5 percent of the country’s gross domestic product.
The country has the highest volume of foreign investment in the EU, which contributes to the $2.73 trillion held by Luxembourg's investment funds, according to an estimate by the financial consulting firm Ogier.
A founding member of the EU, Luxembourg enjoys the privilege of tax secrecy and trust from the international financial community.
The European Commission, along with the G20, has made it their goal to oust secret banking regimes, and until recently, Luxembourg has been very reluctant to sign on.
However, in late October, along with the other 27 member states of the EU, Luxembourg pledged to build a collective financial data exchange starting in 2017 in a step towards ending banking secrecy. Austria will join in 2018.
Other EU countries use the tax haven model to their advantage. Malta has no corporate taxes, Cyprus only levies at 10 percent tax, and Ireland only 12.5 percent. 
 http://rt.com/business/202715-luxembourg-biggest-tax-haven-eu/
6/11/14
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6 comments:

  1. Les pratiques fiscales du Luxembourg sont "conformes aux lois internationales"...

    Les pratiques fiscales du Luxembourg mises en cause par une vaste enquête publiée jeudi, sont "conformes aux lois internationales", a déclaré jeudi le Premier ministre du Grand-Duché, Xavier Bettel, au cours d'une conférence de presse.
    Le "tax ruling", qui permet aux multinationales de faire de l'optimisation fiscale et prive de nombreux pays de recettes importantes, "n'est pas une spécialité du Luxembourg, beaucoup de pays européens la pratiquent", a expliqué de son côté son ministre des Finances, Pierre Gramegna. (Belga)
    http://www.rtl.be/info/monde/europe/1139343/les-pratiques-fiscales-du-luxembourg-sont-conformes-aux-lois-internationales-
    6/11/14

    ReplyDelete
  2. Luxleaks: l’UE prête à sanctionner le Luxembourg, Juncker promet de ne «pas intervenir» ...

    La Commission européenne est prête à sanctionner le Luxembourg sur ses pratiques fiscales, a affirmé un de ses porte-parole, suite aux révélations par Le Soir sur des accords fiscaux secrets entre le Luxembourg et 340 multinationales.

    « S’il y a une décision négative, le Luxembourg devra assumer et prendre des actions pour corriger », a indiqué Margaritis Schinas, le porte-parole de la nouvelle Commission, dont le président Jean-Claude Juncker est l’ancien Premier ministre du Luxembourg....................http://www.lesoir.be/700464/article/economie/2014-11-06/luxleaks-l-ue-prete-sanctionner-luxembourg-juncker-promet-ne-pas-intervenir
    6/11/14

    ReplyDelete
  3. Les accords fiscaux secrets entre le Luxembourg et 340 multinationales dévoilés ...

    Apple, Amazon, Heinz, Pepsi, Ikea, Axa... 340 géants ont passé des accords avec le Luxembourg pour minimiser leurs impôts. Et les autres Etats ont perdu des milliards d'euros de recettes fiscales.

    Après l'Offshore Leaks, un "Luxembourg Leaks" ? Des accords fiscaux secrets entre le Luxembourg et 340 multinationales, dont Apple, Amazon, Ikea, Pepsi ou Axa, afin de minimiser leurs impôts, sont révélés jeudi 6 novembre par 40 médias internationaux s'appuyant sur des documents obtenus par le Consortium international des journalistes d'investigation (ICIJ).

    Ces accords, passés entre 2002 et 2010, représentent des milliards d'euros de recettes fiscales perdues pour les Etats où ces entreprises réalisent des bénéfices, selon l'ICIJ et ses médias partenaires, dont "Le Monde" en France, "The Guardian" au Royaume-Uni, le "Süddeutsche Zeitung" en Allemagne ou l'"Asahi Shimbun" au Japon. L'ICIJ avait dévoilé en janvier les placements de dignitaires chinois dans les paradis fiscaux.................http://tempsreel.nouvelobs.com/economie/20141106.OBS4298/les-accords-fiscaux-secrets-entre-le-luxembourg-et-340-multinationales-reveles.html?xtor=RSS-17
    6/11/14

    ReplyDelete
  4. Luxembourg ‘abetted’ companies in avoiding taxes ...

    The European Commission said on Thursday it was already investigating Luxembourg’s tax treatment of multinationals and could open more probes in European countries after a media report said it had found widespread tax avoidance in the duchy.

    The report piled pressure on new European Commission head Jean-Claude Juncker to explain if he knew about the alleged tax deals during his 24 years as Luxembourg’s prime minister or finance minister.

    “The Commission is acting already,” spokesman Margaritis Schinas told the Commission’s daily news briefing, which was dominated by questions about the report.

    Former EU Competition Commissioner Joaquin Almunia had opened a number of investigations into tax avoidance and his successor in the new Commission, Margrethe Vestager, would continue to act over the next five years to make sure EU state aid legislation was properly enforced, Schinas said...........http://www.france24.com/en/20141106-luxembourg-companies-tax-avoidance-report-pepsi-aig-deutsche-bank/
    6/11/14

    ReplyDelete
  5. Evasion fiscale : Le Pen réclame la démission de Juncker ...

    Le président de la Commission européenne Jean-Claude Juncker doit démissionner en raison de l'évasion fiscale pratiquée par "plusieurs centaines de grands groupes" sur le territoire du Luxembourg, pays dont il a été premier ministre pendant 18 ans, a indiqué jeudi la présidente du Front National, Marine Le Pen, dans un communiqué.

    Le Consortium international des journalistes d'enquête (ICIJ) a auparavant annoncé que plus de 300 sociétés internationales, dont PepsiCo, Apple et Deutsche Bank, auraient pu conclure avec les autorités luxembourgeoises des transactions secrètes axées sur "l'optimisation fiscale". Selon l'ICIJ, ces sociétés auraient transféré des centaines de milliards de dollars via les banques du Grand-Duché afin de payer moins d'impôts................http://french.ruvr.ru/news/2014_11_06/Evasion-fiscale-Le-Pen-reclame-la-demission-de-Juncker-1159/
    6/11/14

    ReplyDelete
  6. Luxembourg tax deal report 'a threat to Juncker'...

    Jean-Claude Juncker, the newly appointed European Commission President and former Prime Minister and Finance Minister of Luxembourg, is facing pressure just six weeks into his job after a wide-ranging investigation by journalists revealed the EU state helped giant corporations avoid paying tax.

    The revelations on Thursday across European media outlets by the International Consortium of Investigative Journalists (ICIJ) highlighted cases involving big name corporations like Pepsi, IKEA and FedEx having secured secret deals with Luxembourg which saved them billions of dollars in global taxes.

    Observers and politicians say the massive leak of internal documents from PricewaterhouseCoopers, one of the world's largest accounting firms, may evolve to threaten the position of the newly appointed EC president.

    A spokesman for Gianni Pittella, leader of the Group of the Progressive Alliance of Socialists and Democrats in the European Parliament, or S&D, told Anadolu Agency (AA): “As the new President of the European Commission, the credibility of Jean-Claude Juncker is on the line."

    "He must show whose side he is on. Is he on the side of European citizens or corporate tax dodgers?" he said...........................http://www.aa.com.tr/en/headline/416426--luxembourg-tax-deal-report-a-threat-to-juncker
    6/11/14
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    ReplyDelete

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