Following today’s revelations by Süddeutsche Zeitung, Le Monde, OCCRP and other media partners about tax avoidance practices in Luxembourg, the Luxembourg government has responded with a statement denying any harmfulness of its tax system. It published this statement on the website www.openlux.lu. In their investigation, journalists made the entire transparency register of beneficial owners of companies and investment funds in Luxembourg completely searchable for the first time. More than 250 billionaires run companies in Luxembourg. According to Le Monde, the companies hold assets of around 6,500 billion euros. In addition, there are an estimated 4,500 billion euros in investment funds. At least 4,600 beneficial owners of companies come from Germany.
MEP Sven Giegold, financial and economic policy spokesperson of the Greens/EFA group commented:
“The reaction of the Luxembourg government could not be more brazen. The country is a thriving intra-European tax haven. If Luxembourg denies being a tax haven, this can only be described as fake news. Luxembourg shows no remorse whatsoever, even though its tax policy causes massive financial damage to other EU countries. During the European Semester of the last three years, the EU has explicitly asked Luxembourg to change its tax system because it invites aggressive tax avoidance.
Luxembourg today acts mainly as a gateway between European countries and tax havens around the world. To act as a tax avoidance gateway, one does not need to have a ‘harmful’ tax system in the technical sense. The government’s statement is a red herring. It is true that nationals and foreigners are treated equally under the law. But the tax rules make Luxembourg particularly attractive for the management of assets abroad. Luxembourg bears a great responsibility in this respect, to which the government should not react with ostrich policies. The country of European founding father Robert Schuman should rethink its tax system, especially in the face of empty public coffers everywhere in Europe after the Corona crisis.
It is true that Luxembourg’s transparency register is better than Germany’s, but this is due to the major shortcomings of the German register. I expect the Luxembourg government to end tax practices that deprive other EU countries of tax revenues. The German government must also act to protect our common good from tax tricks. It is high time that Germany implements the EU’s second Anti Tax Avoidance Directive. Since the end of 2019, the CDU/CSU has been blocking the draft bill of the Federal Ministry of Finance, which is modelled after the corresponding law in France. France has set tight limits on interest rates for loans within a group of companies, preventing the large-scale outflow of profits. Tax tricks via real estate investments are doubly damaging to the common good, as they drive up rents and drive down tax contributions.”
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Press release of the Luxembourg government:
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