Luxembourg, Juncker under fire after global tax leaks

FE Team | Published: November 08, 2014 00:00:00 | Updated: November 30, 2026 06:01:00

BRUSSELS, Nov 07 (AFP): EU finance ministers meet in Brussels Friday, with revelations about Luxembourg's tax breaks for big firms putting pressure on former premier Jean-Claude Juncker, the new European Commission president.
The finance ministers will also hope to end a row over demands for back payments from Britain, with some saying Thursday that paying the bill in instalments was a likely option.
Juncker came under fire Thursday after leaked documents showed the tiny nation gave hundreds of global firms huge tax breaks.
Household names such as Pepsi, IKEA and Deutsche Bank were among companies named by the US-based International Consortium of Investigative Journalists (ICIJ) following a six-month investigation of 28,000 leaked documents.
The revelations risk weakening Juncker's position just days after he took office as head of the EU's executive arm after 19 years as Luxembourg prime minister, the period during which many of the tax deals were sealed.
Juncker's spokesman said the veteran politician was unfazed by the revelations, though he pulled out of a public speaking engagement with former EU commission chief Jacques Delors scheduled Thursday.
Under an hour-long barrage of questions from reporters, the spokesman stressed that EU regulators were already investigating whether Luxembourg's deals with US Internet giant Amazon and the financial arm of Italian carmaker Fiat amounted to illegal state aid.
Spokesman Margaritis Schinas said that if the EU found it breached the rules, "Luxembourg will have to take corrective actions".
The EU's new Competition Commissioner, Margrethe Vestager, said she would "of course" press on with those probes and looked forward to forming a "very concrete picture" of the thorny issue.
Vestager noted "a complete change of mood" in the past few years on taxation, with a huge push by G20 nations to agree new rules to deprive multinationals of easy access to tax havens globally.