Pressure mounts on Juncker to respond to Luxleaks revelations

Jean-Claude Juncker, the new head of the European Commission, is facing increasing pressure to respond to last week's revelations of tax rulings offered by Luxembourg, as he prepares to leave tomorrow for Australia to represent the European Commission at the G20 summit.

Mr Juncker, who was prime minister of Luxembourg when the tax deals revealed by the ICIJ investigation were negotiated, has not yet commented on the affair.

He is due to chair his second weekly meeting of the College of Commissioners tomorrow before leaving for Brisbane. Tax avoidance and profit shifting are set to dominate the summit, which begins on Saturday.

Speaking in Brussels yesterday, a spokesman for the European Commission said Mr Juncker would “choose the moment himself to say what he has to say, either at the G20 or at some other time.”

Most of the main groups in the European Parliament, except for the European People's Party (EPP) which nominated Mr Juncker for Commission president, have said that he needs to answer questions about the affair, though no formal request has been made for Mr Juncker to appear before the parliament.

The European Commission has initiated two state-aid investigations against Luxembourg, and is also engaged in an “information-gathering” exercise about the country’s use of patent boxes, a tax device that allows companies avoid tax on certain forms of intellectual property.

Patent boxes

Eight other countries have also been asked to provide information about patent boxes.

Ireland

announced in its budget last month that it was considering its own “knowledge box” as it confirmed the abolition of the “Double Irish”.

Asked whether the Commission would now commence further investigations in the wake of the Luxleaks scandal which showed that 343 multinational companies slashed their tax bills by negotiating tax rulings with the Luxembourg authorities between 2002 and 2010, a spokesman for the competition division of the European Commission said new information had now come to light. “We are looking at that and seeing how we can proceed,” he said.

He confirmed Luxembourg had still not provided all information requested by the European Commission regarding tax rulings, but said the Duchy had become more co-operative in recent months.

On Friday, Luxembourg's finance minister Pierre Gramegna said the tax rulings offered by his country were "totally legal."