European finance ministers have agreed to new rules that will force countries to share information on tax deals granted to multinational corporations.
Tuesday’s announcement is Europe’s latest response to evidence of widespread tax avoidance exposed by ICIJ’s Luxembourg Leaks investigation in November and December last year.
The LuxLeaks investigation revealed how more than 300 companies had secured agreements with the Luxembourg authorities that allowed many of them to slash their tax bills. The revelations led to calls for the resignation of Jean-Claude Juncker, the current European Commission president who was the prime minister of Luxembourg between 1995 and 2013.
“This is a decisive step towards greater transparency in tax matters,” said Pierre Gramegna, Luxembourg’s finance minister and president of the Economic and Financial Affairs Council, of the new information-sharing agreement.
Gramegna, who insists that his country is not alone in issuing the controversial deals or “tax rulings,” told reporters that “transparency” was his country’s response to LuxLeaks.
President Juncker has made tax transparency a priority of his European presidency but faces ongoing criticism for his role in Luxembourg’s financial architecture.
“I didn't set up any system in Luxembourg for tax avoidance; you are exaggerating my political talent,” Juncker told members of the parliamentary committee that was established in response to LuxLeaks during a hearing on 17 September.
Days later, Juncker faced renewed censure and suggestions he misled parliament after it emerged that he had received in 1997 a sensitive document that outlined potential risks of Luxembourg adopting tax rulings. Juncker had previously claimed not to know that the document existed.
“This is intolerable,” wrote European parliamentarian and member of the special committee on tax rulings Fabio De Masi. “I have written to Mr Juncker last week, urging him to clarify the contradictions in his statements.”
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