Juncker tax files cause ‘shock’

Jean-Claude Juncker

Luxembourg’s government was taken by “complete surprise” by the amount of files revealed last week in a report detailing hundreds of secret corporate deals that allegedly helped multinationals dodge taxes during Jean-Claude Juncker’s tenure as prime minister.

The publication of a “tsunami” of more than 500 so-called tax rulings executed by the government between 2002 and 2010 “totally astonished” Luxembourg finance minister Pierre Gramegna, he told journalists at a briefing yesterday in Luxembourg.

“This was an attack on our country like it has never seen before”, Gramegna said at the briefing with Luxembourg prime minister Xavier Bettel. “Not for one second did I know documents would be leaked and that as a government we would have to answer for what happened in the past.”

More than 340 companies have transferred profits to Luxembourg using complicated tax arrangements, according to leaked documents published by the International Consortium of Investigative Journalists on November 5. The report, which reviewed almost 28,000 pages of confidential tax deals and identifies companies like PepsiCo, Ikea Group and FedEx, said some corporations effectively lowered their tax bill to less than 1%.

Bettel, who took over from Juncker as prime minister last year, said his country is “in the process of disappearing from gray and black lists and enormous efforts are being put into working on the image”.

“It’s not a coincidence that until now, no high-ranking foreign politician has spoken out against the Grand Duchy,” said Bettel. “Finger-pointing against one another is in my view not the right approach.”

Juncker, who was Luxembourg’s prime minister for almost 19 years and took over as commission president on November 1, two days ago ended almost a week of silence since the publication of the documents about tax arrangements carried out while he led the country.

He had no involvement as finance minister or prime minister, Juncker said at a press conference in Brussels.

“There is nothing in my past indicating my ambition was to organise tax evasion,” Juncker said. While he was not the “architect” of the Luxembourg tax model, he is “politically responsible for what happened,” Juncker said.

Bloomberg


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