Luxembourg Leaks was a “game changer” for Luxembourg, which has now given up the fight to keep its tax rulings hidden from European authorities, according to the Duchy’s finance minister.
In an interview with Bloomberg, Luxembourg Finance Minister Pierre Gramegna said the Lux Leaks revelations brought the world’s attention to the issue.
“[Before the leaks], nobody really cared about this,” Gramegna said. “[Now] the whole world has started to discuss [tax] rulings.”
Over the course of November and December ICIJ and its media partners revealed more than 350 multinational companies had secretly obtained tax rulings from Luxembourg that allowed the companies to save billions in tax.
Last week the European Commission expanded its ongoing investigation into secret tax deals to include all 28 member-states.
The move, which Gramegna said “is not a surprise after LuxLeaks,” prompted Luxembourg to abandon a EU-court challenge against handing over details of its secret tax rulings to the Commission.
Instead, the country will now provide the Commission’s investigation with a list of the rulings, including names of companies involved, from 2010 to 2013.
Luxembourg Prime Minister Xavier Bettel told a press conference last week that the expanded European investigation leveled the playing field.
"If the rules are the same for everyone, then we won't be in opposition to that. That's the reason why we decided to drop the two trials we had against the Commission," Bettel said.
Gramegna said Luxembourg has been concerned about “reputational damage” following LuxLeaks, and has been watching for potential negative impact on the financial industry in the Duchy.
“We are confident that if the rules are on the table and known for everybody, why would companies leave Luxembourg?” Gramegna said
“Maybe some in a hurry want to leave Luxembourg in the weeks to come, because they are focused on LuxLeaks; I cannot exclude that,” he said. “For the time being, fortunately, we have not witnessed that.”
In addition to improved cooperation with the Commission investigation, Gramegna said Luxembourg was also pushing ahead with new legislation that aimed at greater transparency and oversight of the tax ruling procedure.
While the legislative and administrative bodies promised reform and cooperation last week, earlier in the month Luxembourg prosecutors brought charges of theft and violation of trade secrecy against an alleged whistleblower from audit firm PricewaterhouseCoopers.
French citizen Antoine Deltour, 28, told French newspaper Libération that he acted from conviction, after he was “dismayed” by the tax rulings.
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