Commission president Jean Claude Juncker called for tax harmonisation when addressing allegations that he oversaw hundreds of sweetheart tax deals that let multinationals escape paying billions of euro in taxes.
Questioned by the European Parliament’s special tax committee, the former Luxembourg prime minister, who was also finance minister, insisted he had nothing to do with the revelations, known as LuxLeaks, that the country facilitated more than 330 companies to evade tax.
Instead, he said, it should be called EULeaks because of the common practice among member states and multinationals were extremely adept at making use of the different tax rules and administrative procedures.
“The system we have is unusable and unjust,” said Mr Juncker.
“Some lose out because of an unfair, un-transparent system. Others benefit because they can hide behind variable national rules that make the whole European system difficult to understand and opaque.
“It is our job to bring some order into this chaotic situation.”
He said the commission did not want to end tax competition but to have clear simple rules to put an end to unfair tax composition, and have profits taxed where they were generated.
Mr Juncker, who was prime minister for 18 years, said he did not set up any system in Luxembourg to ensure there was tax avoidance to discriminate against other EU states.
“You exaggerate my political talent,” he told MEPs.
Legislation was drawn up by the minister and the tax authority applies rules.
“The Luxembourg authority is very allergic to ministerial interference… you have an exaggerated idea of the power of the prime minister,” he said.
He agreed that he met with banks which was normal for the finance minister in a country where banks played a very important role, but he said he never talked about tax arrangements with the Commerzebank.
After about 30 minutes, Mr Juncker left abruptly before the end of the meeting, saying the remaining questions were more relevant to Taxation Commissioner Pierre Moscovici who was also attending.
After the hearing, Mr Moscovici told journalists that eleven countries were close to agreeing to move together through enhanced co-operation on introducing a financial transaction tax on trades including derivatives. Ireland is not part of the group.
© Irish Examiner Ltd. All rights reserved