Fresh pressure on recently elected European Commission president Jean-Claude Juncker is likely as a new set of leaked documents shows more multinational corporations, including Walt Disney and Skype, negotiating advanced tax deals with the Luxembourg authorities.
The new batch of leaked confidential documents expands the list of major corporations known to have secret deals with the Luxembourg tax authorities, and includes the politically controversial Koch Industries conglomerate and 33 other companies.
While the first, larger batch of “Lux Leaks” documents last month was concerned with advanced tax agreements negotiated by PwC in Luxembourg, the new batch includes other “Big Four” accountancy firms KPMG, Deloitte and EY (formerly Ernst & Young).
The latest revelations come on the same day as European Union finance ministers rubber-stamped new rules on the automatic exchange of information on bank accounts and pledged to introduce new standards on “patent boxes”.
Koch Industries is the second-largest privately owned business in the United States and its owners, brothers David and Charles Koch, are known for the funding of political and libertarian causes and Republican politicians associated with the Tea Party.
The new batch of documents includes tax agreements that involve an Irish subsidiary of the Skype business, which is now owned by Microsoft, as well as funding structures used by Hong Kong-based Hutchison Whampoa to support the activities of 3, the mobile phone operator that supports the Irish soccer and rugby teams.
The Washington DC-based International Consortium of Investigative Journalists (ICIJ) received the leaked documents last month, soon after publishing an earlier set of leaked documents detailing Luxembourg tax deals negotiated by FedEx, Pepsi, Ikea and 340 other globe-spanning companies.
Details of the latest deals are being published by The Irish Times, the Guardian, Süddeutsche Zeitung, Politiken, the Danish Broadcasting Corporation and other ICIJ media partners.
There is no suggestion that there is anything illegal about the tax deals. However, the detail of the agreements has created global controversy. Mr Juncker, prime minister of Luxembourg when it was building its reputation for attracting multinational business, has said the deals were all legal but has accepted they led to “feeble” tax yields. The interaction of national and international tax law resulted in a level of taxation “which doesn’t correspond to the notion of fiscal justice”, he said.
The European Commission has said it will investigate the contents of last month’s leaks and it will no doubt also include the new documentation within the planned inquiry.
The accountancy firms involved said they could not comment on client affairs but added that they had at all times acted in accordance with the law and their own ethical and professional codes.
