Juncker rejects tax probe

European Commission president Jean-Claude Juncker has sought to blunt an early challenge to his leadership by rebutting allegations that he presided over sweetheart corporate tax deals during almost 19 years as prime minister of Luxembourg.

Juncker said he won’t interfere with a European Union probe of his country’s potentially unlawful tax breaks. The investigation may be widened after last week’s disclosures by a journalists’ group that Luxembourg helped more than 340 companies shave tax bills.

“I don’t understand how some papers can write Juncker vs Juncker,” he told reporters in Brussels.

“There is no conflict of interest.” The “LuxLeaks” revelations drag Juncker back into his past less than two weeks after he took over the EU’s executive arm with plans to shore up the economy and stem the anti- European mood that has engulfed the bloc in the aftermath of the euro debt crisis.

Juncker ended a week of silence after the publication by the International Consortium of Investigative Journalists of almost 28,000 documents that outlined preferential tax arrangements offered by Luxembourg.

While companies took advantage of “divergent norms,” Juncker said the work of Luxembourg’s tax authorities “corresponds to national law and to internationally applicable rules”.

As finance and prime minister, Juncker said, he had no involvement in tax rulings. “There is nothing in my past indicating that my ambition was to organise tax evasion,” Juncker said.

He went on the offensive with a proposal requiring EU governments to share special tax rulings with each other, closing loopholes that allow multinationals to set up special financing vehicles and shop around for the lowest tax. Such legislation would end the well-established practice in which 22 European governments offer companies rarely publicised tailor-made tax concessions, Juncker said.

EU-wide tax legislation requires the approval of all 28 EU governments. Juncker said he will take the proposal to the Group of 20 meeting in Brisbane, Australia later this week in an effort to make it global.

Juncker also backed a proposal for a common method for calculating corporate income, which would make it harder for companies to play tax jurisdictions off against each other. Ireland, Britain and others have objected to EU-wide tax harmonisation.