More than 300 companies, including PepsiCo Inc, AIG Inc and Deutsche Bank AG, secured secret deals from Luxembourg to slash their tax bills, the International Consortium of Investigative Journalists (ICIJ) reported, quoting leaked documents. Commission President Jean-Claude Juncker, a former prime minister of Luxembourg, was asked yesterday (5 November) to comment.
The companies appear to have channeled hundreds of billions of dollars through Luxembourg and saved billions of dollars in taxes, the group of investigative journalists said, based on a review of nearly 28,000 pages of confidential documents.
The leaked documents reviewed by ICIJ journalists include hundreds of private tax rulings – known as comfort letters – that Luxembourg provides to corporations seeking favorable tax treatment.
Luxembourg officials denied any “sweetheart deals” in its tax system.
“The Luxembourg system of taxation is competitive – there is nothing unfair or unethical about it,” ICIJ quoted Nicolas Mackel, chief executive of Luxembourg for Finance, as saying in an interview.
Pepsi, AIG and Deutsche Bank were not immediately available for comment.
EU state aid regulators are investigating Amazon’s tax deals with Luxembourg, saying the arrangements could have underestimated the US online retailer’s profits and given it an unfair advantage, Reuters reported in October.
In October, the European Commission opened an inquiry over whether EU law has been broken by the tax deals in Luxembourg.
Commission President, Jean-Claude Juncker, who was Prime Minister of Luxembourg from 1995 to 2013, was asked yesterday (5 November) if there wasn’t a conflict of interest since he took over as chief of the EU executive.
Juncker said that such a question deserved a long answer, but that in any case, the Commission was perfectly in its right to investigate, and that he would not interfere in the work of the Commissioner in charge of competition, Margrethe Vestager.
“I wouldn’t do it, because that would not be decent. I have my idea about the issue, but I will keep it to myself,” he said.