Sign in. It’s quick, free and it’s up to you.
An account is an optional way to support the work we do. Find out more.
Updated at 5.23pm
EU COMMISSION CHIEF Jean-Claude Juncker vowed today to fight tax avoidance in Europe after new revelations showed Disney, Microsoft and Koch Industries got bumper tax deals from Luxembourg when he was prime minister.
They were among dozens of companies dragged into the Luxembourg tax avoidance “Luxleaks” scandal with the release of a new wave of documents by investigative journalists.
The revelations, including that entertainment giant Disney, the home of Mickey Mouse, paid just over a quarter of one percent in tax on over €1 billion in profits funnelled through the tiny duchy, increase pressure on Juncker over Luxembourg’s tax policies during his 19 years in office.
As he arrived in Luxembourg for his official swearing in after taking the helm at the Commission in November, Juncker reiterated that tackling tax avoidance had been one of his campaign promises earlier this year.
For tax harmonisation, the coordination and bringing together of tax policies is an absolute necessity. I will do it,” Juncker said.
But Juncker, who turned 60 on Tuesday, hinted that the scandal was being used as a way to attack him in his first weeks in the job, saying that the timing of the leaks was “not a coincidence”.
In an interview published earlier today, Juncker said he had been “weakened” by the scandal but repeated his insistence that he was not personally involved in the deals for major corporations.
Secret deals to dodge billions in tax
The first instalment of Luxleaks documents in November revealed that hundreds of the world’s biggest companies brokered secret deals with Luxembourg to avoid paying billions of dollars in taxes.
The new claims emerge from 28,000 pages of documents obtained by the International Consortium of Investigative Journalists (ICIJ) and examined by dozens of newspapers.
They detail “aggressive tax structures” brokered for major companies by accountants Ernst & Young, KPMG, PwC and Deloitte between 2003 and 2011.
The reports say Internet calling business Skype, owned by Microsoft, used an Irish subsidiary to allow its Luxembourg unit to report no corporate tax over five years.
Meanwhile, Koch Industries – owned by the powerful US conservative political donors the Koch brothers – and the Walt Disney Company had complex arrangements to channel “hundreds of millions of dollars in profits through Luxembourg” from 2009 to 2013 and pay little tax, the ICIJ said.
Canadian aerospace giant Bombardier and communications firm Telecom Italia are also named in the documents, according to Belgian newspaper Le Soir, which reported that Disney was afforded a 0.28 percent tax rate in the arrangements.
British newspaper The Guardian reported that the new documents name major consumer goods company Reckitt Benckiser and Lycra company Invista, owned by the Koch brothers.
A six-month deadline
Juncker easily survived a vote of confidence in the European Parliament in November over Luxleaks, in which he had the backing of his own centre-right group, plus the rival socialists.
But when asked today if the socialists might now withdraw their confidence, leader Gianni Pittella gave Juncker six months to come up with proposals to settle the tax avoidance problem.
The trust we’ve instilled in him is not a blank check. It is conditional on his actions,” Pittella said.
Commission spokesman Ricardo Cardoso said Juncker would not stand down.
The November leaks, which named companies including Apple, Pepsi, IKEA and Heinz as tax breaks beneficiaries while Juncker was prime minister, hit less than a week after he took office at the head of the European Commission.
The European Commission has fought back on the issue, announcing agreements on Tuesday to close loopholes and to ensure the exchange of tax information between the EU’s 28 member states.
Since June, the commission has also launched investigations into the tax affairs of Amazon and Fiat in Luxembourg, Apple in Ireland and Starbucks in The Netherlands to determine whether sweetheart tax deals could constitute illegal state aid.
To embed this post, copy the code below on your site
Climate change. Any bad weather is a direct result of global warming / climate change
@Christopher Byrne: Was It global warming that caused the flooding over a century ago or was it just a freak storm?
@Slippy ❤️: sarcasm mate…sarcasam. I live in Perth and we’ve has the coldest winter in the 6+ years I’ve lived here but Ive no doubt it will be reported as the hottest on record
@Christopher Byrne: higher average global temperatures result in more moisture in the atmosphere which makes storm systems powerful. So yes the strength of this storm was added today b the fact that GLOBAL temperatures are rising. Weather is a global system, it doesn’t care if it’s been cold in Australia lately. Some models suggest that Europe might actually get colder over the coming decades as a result of GLOBAL average temperatures rising if it continues.
@M: Yes, climate models. Very reliable they’ve proven to be….We can’t predict weather reliably 2 weeks in advance but we’re supposed to believe in these models forecasting 30 years down the track as gospel. Despite the fact most if not all of them have failed to accurately predict the future
@Christopher Byrne:
I think you’ve been living in the colonies for too long….mate.
@Tweed Cap: wow I don’t know how to even begin talking to you when you say something as clueless as that . climate is not the same thing as weather. Are you saying that releasing huge amounts of greenhouse gases into the atmosphere will not cause global temperatures to rise? …Why not?
@Christopher Byrne: don’t stray too far from home you’ll fall off the edge of the earth
@Christopher Byrne: I love listening to people who have read some articles and now know it all. Just proves studying and practicing science is a waste of time, we just need an opion
@Christopher Byrne: isn’t winter 2 months away yet? Also weren’t there record highs recorded in summer in parts of Oz? Also, true or false, don’t parts of Oz have a monsoon season and isn’t this just an extreme version of that?
@Dave O Keeffe: No, on all counts
@Boganity: I think you’ll find you’re incorrect on all points. Australian winter is our summer months. They had record temperatures over Christmas, and there is indeed a monsoon season in parts of Australia.
have your say