Antoine Deltour and Raphaël Halet, the whistleblowers who lifted the lid on the 'LuxLeaks' scandal, have been found guilty of stealing documents, revealing business secrets and violating trade secrets.
Deltour was handed a 12 month suspended sentence, while Halet was delivered a nine month suspended sentence. They also received suspended fines of €1500 and €1000 respectively.
Prosecutors had sought 18 month sentences for the pair, who are former PriceWaterhouseCooper employees. They faced a maximum sentence of 10 years. Deltour has already announced plans to appeal the Luxembourg court's decision.
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Edouard Perrin, the journalist who shed light on the affair, was acquitted.
The LuxLeaks scandal, which broke out in November 2014, revealed how Luxembourg reached questionable tax deals - known as 'sweetheart deals' - with multinational firms, effectively allowing them to pay very little tax. The deals were reached at a time when European Commission President Jean-Claude Juncker was Prime Minister.
MEPs and campaigners have expressed their outrage at the guilty verdicts, calling for better protection of whistleblowers.
Pervenche Berès, S&D group spokesperson for economic and monetary affairs, said: "It is a disgrace that this case has ever come to court; there is something fundamentally wrong with the legal system when those who expose wrong doing face trial while the perpetrators continue their lives as before.
"People who expose illegal activity, government or employer misconduct, should be celebrated, not prosecuted. They help to ensure that even the rich and powerful can be held to account for any wrongdoing. In doing so, they often put their own careers, personal freedom and entire future at risk. It is therefore vital that individuals acting for the common good are given adequate protection under EU law."
Her colleague Evelyn Regner branded the verdict "contemptuous" and said, "Not only do whistleblowers face punitive legal action, but they almost certainly will lose their jobs and face long term unemployment for doing the right thing.
"They may have to give up on what they have spent their life building: a steady income, good job, normal family life. In the worst cases they might become subject to physical aggression or threats."
She added, "We want to see in the legal framework a guarantee that those exposing illegal, immoral, improper or unethical activities are protected from retaliation or prosecution. We are calling on the Commission to treat this as a matter of urgency and put forward new proposals without delay."
Peter Simon, the Socialist spokesperson for Parliament's special tax committee - which was set up to investigate the LuxLeaks revelations - commented, "This judgment is a scandal. For a democracy to work it is clear that we need transparency, if we continue to treat whistleblowers as criminals then we will never be able to provide that."
Benedek Javor, who is the Greens/EFA group spokesperson on transparency, said, "There can be absolutely no doubt that Antoine Deltour, Raphaël Halet and Edouard Perrin were serving the public interest. To punish them for their actions is the opposite of what a rational legal system in a democracy should be doing. We will support them in their appeal."
He also underlined that, "This trial has driven home the precarious situation of whistleblowers even in modern democratic states. The only way to ultimately resolve this is by providing clear legal protection for whistleblowers."
Tove Ryding, tax justice coordinator at the European Network on Debt and Development (Eurodad) said: "The sentences imposed on these men are a complete disgrace and an indictment of the system that has condemned them. They acted in the public interest and deserve thanks and protection from prosecution.
"They revealed the secret tax deals that allowed huge corporations to pay next to nothing to the public purse. These kind of deals mean both developed countries, and the poorest nations in the world, lose billions every year.
"This information should not have been secret in the first place. There is no reason why citizens should not be allowed to know where multinational corporations do their business and where they pay their taxes."
Ryding called for better protection of whistleblowers, "so that happened to these three men today can never happen again. We also believe it is about time for the politicians to make multinational corporations publish the numbers showing where they make their profits and where they pay their taxes."