LONDON: Dozens of companies including Microsoft, Disney and Koch Industries were dragged into the Luxembourg tax avoidance “LuxLeaks” scandal with the release of new documents by investigative journalists.
The revelations increase pressure on former prime minister Jean-Claude Juncker over Luxembourg’s tax policies during his 19 years in office, and come on the eve of his swearing-in as president of the European Commission. The new claims emerge from 28,000 pages of documents obtained by the International Consortium of Investigative Journalists (ICIJ), and examined by dozens of newspapers.
The first installment in November revealed hundreds of the world’s biggest companies brokered secret deals with Luxembourg to avoid paying billions of dollars in taxes.
The new documents detail “aggressive tax structures” brokered for major companies by accountants Ernst & Young, KPMG, PwC and Deloitte between 2003 and 2011, when Juncker was in office.
They contain confidential “tax rulings” from Luxembourg officials that “assure companies they will get favourable treatment for their tax-saving manoeuvres”, according to the ICIJ.
The reports claim internet calling business Skype, owned by Microsoft, used an Irish subsidiary to allow its Luxembourg unit to report no corporation tax over five years.
Meanwhile, entertainment giant the Walt Disney Company and Koch Industries had complex arrangements to channel “hundreds of millions of dollars in profits through Luxembourg” from 2009 to 2013 and pay little tax, the ICIJ said.
Canadian aerospace giant Bombardier and communications firm Telecom Italia are also named in the documents, according to Belgian newspaper Le Soir, which reported that Disney was afforded a 0.28 percent tax rate in the arrangements.
British newspaper The Guardian reported the documents name major consumer goods company Reckitt Benckiser and Lycra company Invista, owned by the powerful US conservative political donors the Koch brothers.
“The ‘LuxLeaks’ scandal is a recent example of the kind of corrosive deals that big companies are able to extract from countries when they think no one will see,” the dozens of international journalists wrote in the open letter.
The November leaks, which named companies including Apple, Pepsi, IKEA and Heinz as tax breaks beneficiaries while Juncker was prime minister, hit less than a week after he took office at the head of the European Commission. AFP
