Home 2017 General Election Brexit Jean-Claude Juncker under fire from own MEPs over special tax deals

Jean-Claude Juncker under fire from own MEPs over special tax deals

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MEPs from the European Parliament quizzed the European Commission president over the numerous sweetheart deals made with large multinational companies from 1989-2009, which has been dubbed the Lux Leaks scandal.

The various deals with numerous big companies such as Pepsi, IKEA, AIG, Coach, Deutsche Bank, Abbott Laboratories and nearly 340 other companies were made during when Mr Juncker was firstly Minster of Finance in Luxembourg and later Prime Minister of Luxembourg.

The deals allowed many of the companies to slash their global tax bills.

MEPs have ordered Mr Juncker to explain his role in the scandal, which came to light when the deals were revealed by the International Consortium of Investigative Journalists.

The consortium revealed how accountants PricewaterhouseCoopers helped multinational companies obtain at least 548 tax rulings in Luxembourg from 2002 to 2010.

The rulings, essentially provided written assurance that companies’ tax-saving plans would be viewed favourably by the Luxembourg authorities.

In a scathing report the Greens/European Free Alliance (EFA)said “nobody has been held accountable” for the scandal.

A statement from the Greens/EFA said: “Although the complicity of some European member states in this game was proven in the European Parliament’ inquiries, so far nobody has been held accountable for these scandals.

“Even ‘Mister Clean’ Jean-Claude Juncker, former Finance and Prime Minister of Luxembourg, refused any responsibility whilst it is generally recognised that Luxembourg issued tailored tax rulings to multinational corporations and thus actively helped to dodge taxes elsewhere.”

The Greens/EFA report published a report showing how Luxembourg attempted between 2003 and 2005 — when Mr Juncker was Prime Minister – to block moves aimed at fighting tax evasion.

According to the report by the Greens and EFA, Luxembourg eventually managed to gain an important concession – instead of automatically exchanging information, it was authorised to levy a withholding tax deducted from interest earned in Luxembourg, partially passed on to the EU country of residence.

The report said: “The behaviour of Luxembourg was even more detrimental to its neighbours as the Grand Duchy tolerated the creation of a tax avoidance business on its territory helping wealthy individuals to formally move the ownership of their funds into offshore companies located in tax havens and thus escaping the scope of this legislation.”

The financial and economic policy spokesperson for the Greens/EFA Group in the European Parliament, Sven Giegold, said: “Jean-Claude Juncker must explain his role in Luxembourg’s tax haven business in front of the inquiry committee and take responsibility for his past mistakes.

For years, Luxembourg has blocked European tax cooperation and established loopholes that have led to enormous tax losses in other EU countries. From 2003 onwards, Luxembourg has made money from the circumvention of European rules.

“The business model established by Luxembourg has cost European countries at least 300 million euros in lost tax revenue. The tax evaders must be prosecuted before the limitation period begins. The authorities in Luxembourg must pass on information to the law enforcement authorities in their partner countries.

“We call on Jean-Claude Juncker to propose a directive on the enforcement of tax justice in Europe. All EU countries must cooperate in the pursuit of tax evaders, instead of protecting the offenders.”

Between 2005 and 2016 Germany, Denmark, Spain, France, Britain, Italy, the Netherlands, Portugal and Sweden lost over £261 million (€300m) in tax revenue, according to the Greens/EFA.

Jean-Claude Juncker, the President of the European Commission

Mr Juncker is facing a massive backlash in France over his alleged involvement in the Lux Leaks scandal.

Earlier this year 83,000 people signed a petition calling on the politician to resign as he faced calls for a vote of no confidence.

In the petition Jacques Nikonoff, professor of economics in Paris VIII, said the leaders of the Grand Duchy were aware of tax evasion.

Mr Nikonoff said: “Luxembourg Leaks is a gigantic financial scandal involving several hundred agreements between the Grand Duchy’s tax office and audit firms on behalf of multinational firms.

“Consequently, Mr Juncker must leave his position as President of the European Commission.

“Either he resigns himself if he has a little decency, or the European commissioners appoint another president.

“This is what the European Commission had done in 1999 when the then president, Jacques Santer, resigned.

“He was accused of covering up fraud and nepotism.

“The European Parliament may also censure the Commission, thus obliging it to do the housework.”

A European Commission spokesperson told Express.co.uk: “The Juncker Commission has lead the crackdown on tax avoidance and tax evasion, putting the EU in the driving seat of global efforts in this field.

“Over the past two and a half years, we have driven through more initiatives to clamp down on tax dodging in the EU than happened in the previous twenty years.

“President Juncker made this fight one of the central tenets of his campaign to become Commission President. We have more than delivered on this pledge. It’s a priority in our political guidelines.

“The Juncker Commission has been able to drive through major tax avoidance reforms that have completely changed the taxation landscape.

“Thanks to binding measures and greater transparency, it’s now much harder for large companies to get away with not paying for their fair share of tax.

“We also put in place a strategy to deal with non-EU countries that don’t play fair when it comes to tax and we’re drawing up a blacklist of tax havens.

“This summer, we will be putting forward a proposal to tackle the role that some intermediaries – such as accounting firms or banks – play when it comes to aggressive tax planning.

“We have made unprecedented strides to boost tax transparency and to close loopholes leading to large scale tax avoidance at EU level since this Commission took office.

“These are steps that would have been unthinkable just a few short years ago and without the political will and drive of President Juncker.”

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