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Journalism of Courage
More than 300 companies, including PepsiCo Inc, AIG Inc and Deutsche Bank AG, secured secret deals from Luxembourg to slash their tax bills, the International Consortium of Investigative Journalists (ICIJ) reported, quoting leaked documents.
The companies appear to have channeled hundreds of billions of dollars through Luxembourg and saved billions of dollars in taxes, the group of investigative journalists said, based on a review of nearly 28,000 pages of confidential documents.
The leaked documents reviewed by ICIJ journalists include hundreds of private tax rulings — known as comfort letters — that Luxembourg provides to corporations seeking favorable tax treatment.
Luxembourg officials denied any “sweetheart deals” in its tax system.
“The Luxembourg system of taxation is competitive — there is nothing unfair or unethical about it,” ICIJ quoted Nicolas Mackel, chief executive of Luxembourg for Finance, as saying in an interview.
Pepsi, AIG and Deutsche Bank were not immediately available for comment.
EU state aid regulators are investigating Amazon’s tax deals with Luxembourg, saying the arrangements could have underestimated the US online retailer’s profits and given it an unfair advantage, Reuters reported in October.
The European Commission said on Thursday it was already investigating Luxembourg’s tax treatment of multinationals and could open more probes in European countries after a media report said it had found widespread tax avoidance in the duchy.
The report piled pressure on new European Commission head Jean-Claude Juncker to explain if he knew about the alleged tax deals during his 24 years as Luxembourg’s prime minister or finance minister.
“The Commission is acting already,” spokesman Margaritis Schinas told the Commission’s daily news briefing, which was dominated by questions about the report.
But Schinas avoided repeated questions about whether Juncker had been aware of the deals, referring such questions to the Luxembourg authorities.
