International research by Süddeutsche Zeitung, Le Monde, OCCRP and other media partners reveals with new data that Luxembourg remains a thriving tax haven – even after the LuxLeaks scandal. For the first time, they have made the entire beneficial ownership transparency register for companies and investment funds in Luxembourg completely searchable. More than 250 billionaires run companies in Luxembourg. 15,000 investment funds are registered there. The data published under the catchword “OpenLux” reveal how companies first move their profits to Luxembourg via intra-company loans and then on to other tax havens. Shady investors also manage their money unchallenged via Luxembourg. EU countries like Germany are thus deprived of tax revenues. We Greens in the European Parliament had only recently published a study on the use of the tax haven Luxembourg for tax tricks on real estate.
MEP Sven Giegold, financial and economic policy spokesperson of the Greens/EFA group commented:
“It borders on outrageous how Luxembourg’s tax haven continues to flourish. Basically, Luxembourg continues as if there had been no tax scandals. Lip service does not end the damage to the common good of other countries. Luxembourg today acts primarily as a sluice between European countries and tax havens around the world. Luxembourg tramples on the European spirit when it deprives other EU countries of their tax revenues. The worst thing is that other European governments stands idly by and watch the tax avoidance of real estate through intra-corporate loans. Some EU countries have already put breaks to this tax avoidance scheme. Denmark taxes interest payments in tax havens. France has set tight limits on interest rates on loans within a group of companies, preventing this form of large-scale outflow of profits.
The German government must finally stop the massive damage to the common good. 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 present draft bill of the Federal Ministry of Finance, which provides for rules based on the French model. Tax tricks via real estate investments are doubly damaging to the common good, because they drive rents up and tax contributions down. Collecting rents without paying taxes is a perverse business model.
The revelations also show the potential of public business and transparency registers, which only came about after a negotiating success by the European Parliament. But the publications also show the weaknesses of the transparency register. The introduction was a great success, but the implementation is poor. This applies to Luxembourg as well as to Germany. It must be possible to search the register for the beneficial owners of companies. Police and public prosecutors must have electronic access to the register. Authorities should be able to search the register as journalists have now done after a lot of IT work. It must be noticed when a known criminal is behind a company. The possibilities of the register to fight tax avoidance and money laundering must be consistently exploited. The EU Commission must finally take action against incomplete transparency registers with infringement proceedings. To this end, I will request a hearing in the European Parliament.”
Study of our Green Group in the European Parliament on the smuggling of German real estate profits via the tax haven Luxembourg:
https://sven-giegold.de/en/study-tax-avoidance-real-estate/
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