Luxembourg systematically blocked EU tax evasion rules, says new report

A new report claims to show how the Luxembourg government has systematically blocked European laws to prevent tax evasion and obtained exemptions.

New report claims Luxembourg has systematically blocked European laws to prevent tax evasion  | Photo credit: Flickr creative commons

By Martin Banks

Martin Banks is a senior reporter at the Parliament Magazine

31 May 2017


The study focuses on Luxembourg's tax practices when Commission President Jean-Claude Juncker was Prime Minister, including alleged illegal tax evasion by private individuals.

The report, by Parliament's Greens/EFA group, says Luxembourg created a business model to enable wealthy people from other EU countries to circumvent weakened rules.

The study covers the scale of this business model and outlines the sidestepping of European law that has taken place in Luxembourg.


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It says Juncker must accept personal responsibility in blocking the fight against tax evasion.

The report was published to coincide with an appearance in Parliament on Tuesday by the Commission President. He spoke at Parliament's investigatory committee on money-laundering and tax evasion (PANA). 

The Greens/EFA report says that for years, Luxembourg blocked European tax cooperation and established loopholes that have led to enormous tax losses in other EU countries. 

"From 2003 onwards, Luxembourg has made money with the circumvention of European rules," it says. 

Sven Giegold, the financial and economic policy spokesperson for the Greens/EFA group, said, "Juncker must explain his role in Luxembourg's tax haven business in front of the inquiry committee and take responsibility for his past mistakes. 

"For years, Luxembourg has blocked European tax cooperation and established loopholes that have led to enormous tax losses in other EU countries. From 2003 onwards, Luxembourg has made money with the circumvention of European rules.

"The business model established by Luxembourg has cost European countries at least €300m in lost tax revenue. The tax evaders must be prosecuted before the limitation period begins. The authorities in Luxembourg must pass on information to the law enforcement authorities in their partner countries.

"We call on Juncker to propose a directive on the enforcement of tax justice in Europe. All EU countries must cooperate in the pursuit of tax evaders, instead of protecting the offenders."

On Tuesday, Juncker faced questions about his current and past record when it comes to tax transparency and justice.

Giegold, on Juncker's appearance, said, "Juncker may be blind to the past, but he has now made some concrete commitments for the future. It is disappointing that Juncker has refused to accept responsibility for past mistakes or admit the error of his ways. However, Juncker's commitments today represent the foundations for greater tax justice in Europe."

 

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