Jean-Claude Juncker, the head of the European Union executive, has said he would lead a campaign against tax avoidance and evasion, after dominating Luxembourg politics for 20 years during which the Grand Duchy got rich on the most systematic tax avoidance practices known in Europe.
Less than a fortnight into his five-year term as the new president of the European commission, Juncker broke his silence on revelations in the Guardian and other newspapers showing how the Luxembourg tax authorities exploited complex loopholes to enable multinationals to minimise their tax exposure, depriving other EU countries of tens of billions in revenue.
Juncker said he had just ordered the drafting of a new EU directive on automatic exchange of information on national tax rulings between member states, and argued he had supported tax harmonisation in the EU since 1991.
“This commission will fight tax evasion and tax avoidance,” he declared. “This is not just words. This is very much the intention.”
Asked why anyone should believe him when the evidence suggested his two decades in power in Luxembourg had been a bonanza time for corporate tax avoidance, he replied: “Because I said so.”
Questioned as to whether his credibility as a European leader had been shredded by the disclosures of sweet deals for international businesses while he was recommending austerity and public spending cuts, he told an Italian reporter: “I am as suitable [to lead Europe] as you are.”
Juncker admitted he had made a mistake by vanishing from public view since the revelation last week of the taxation details contained in a leaked cache of 28,000 pages from PricewaterhouseCoopers documents. He insisted that everything that occurred in Luxembourg was in line with EU and international norms and regulations.
“I am not the architect of the Luxembourg model because this model doesn’t exist,” he said. Juncker was finance minister of the Grand Duchy for 20 years till 2009 and simultaneously prime minister for 18 years until losing an election last year.
He was the longest-serving prime minister in the EU and chaired the committee of eurozone finance ministers from 2010, throughout the single currency crisis. The committee has been a key body in administering savage austerity in southern Europe and Ireland.
The European commission, the Brussels-based body headed by Juncker since the start of the month, was already investigating alleged tax concessions made by Luxembourg on his watch to Amazon and a subsidiary of Fiat, but last week’s revelations go much further, involving scores of companies.Juncker denied any conflict of interest.
“We have a competition commissioner who has a great deal of independence,” he said.
“I don’t understand why the press is producing headlines such as Juncker versus Juncker.” While the Luxembourg regime was legal, Juncker admitted the system was “not always in line with fiscal fairness” and may have breached “ethical and moral standards”.
He said he had been completely responsible for what happened under his stewardship of Luxembourg, but at the same time stressed that its tax administration “operates autonomously”.
The basis of the industrial-scale tax avoidance system were the tax rulings or “comfort letters” issued by the Luxembourg authorities to PwC acting for its clients.
Juncker said such tax rulings were common in 22 of 28 EU member states. The answer to the problem was not to be found in Luxembourg, he said, but through pan-EU moves to enforce “tax harmonisation”. This would require the unanimous backing of 28 governments and is viewed as a non-starter.
theguardian.com
Less than a fortnight into his five-year term as the new president of the European commission, Juncker broke his silence on revelations in the Guardian and other newspapers showing how the Luxembourg tax authorities exploited complex loopholes to enable multinationals to minimise their tax exposure, depriving other EU countries of tens of billions in revenue.
Juncker said he had just ordered the drafting of a new EU directive on automatic exchange of information on national tax rulings between member states, and argued he had supported tax harmonisation in the EU since 1991.
“This commission will fight tax evasion and tax avoidance,” he declared. “This is not just words. This is very much the intention.”
Asked why anyone should believe him when the evidence suggested his two decades in power in Luxembourg had been a bonanza time for corporate tax avoidance, he replied: “Because I said so.”
Questioned as to whether his credibility as a European leader had been shredded by the disclosures of sweet deals for international businesses while he was recommending austerity and public spending cuts, he told an Italian reporter: “I am as suitable [to lead Europe] as you are.”
Juncker admitted he had made a mistake by vanishing from public view since the revelation last week of the taxation details contained in a leaked cache of 28,000 pages from PricewaterhouseCoopers documents. He insisted that everything that occurred in Luxembourg was in line with EU and international norms and regulations.
“I am not the architect of the Luxembourg model because this model doesn’t exist,” he said. Juncker was finance minister of the Grand Duchy for 20 years till 2009 and simultaneously prime minister for 18 years until losing an election last year.
He was the longest-serving prime minister in the EU and chaired the committee of eurozone finance ministers from 2010, throughout the single currency crisis. The committee has been a key body in administering savage austerity in southern Europe and Ireland.
The European commission, the Brussels-based body headed by Juncker since the start of the month, was already investigating alleged tax concessions made by Luxembourg on his watch to Amazon and a subsidiary of Fiat, but last week’s revelations go much further, involving scores of companies.Juncker denied any conflict of interest.
“We have a competition commissioner who has a great deal of independence,” he said.
“I don’t understand why the press is producing headlines such as Juncker versus Juncker.” While the Luxembourg regime was legal, Juncker admitted the system was “not always in line with fiscal fairness” and may have breached “ethical and moral standards”.
He said he had been completely responsible for what happened under his stewardship of Luxembourg, but at the same time stressed that its tax administration “operates autonomously”.
The basis of the industrial-scale tax avoidance system were the tax rulings or “comfort letters” issued by the Luxembourg authorities to PwC acting for its clients.
Juncker said such tax rulings were common in 22 of 28 EU member states. The answer to the problem was not to be found in Luxembourg, he said, but through pan-EU moves to enforce “tax harmonisation”. This would require the unanimous backing of 28 governments and is viewed as a non-starter.
theguardian.com
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