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Jean-Claude Juncker admits sweetheart tax deals sullied reputation as EU head Jean-Claude Juncker admits sweetheart tax deals sullied reputation as EU head
(about 5 hours later)
Jean-Claude Juncker has admitted his reputation as head of the EU executive has been sullied by the disclosure of sweetheart tax deals in Luxembourg that saved multinational companies tens of billions of euros.Jean-Claude Juncker has admitted his reputation as head of the EU executive has been sullied by the disclosure of sweetheart tax deals in Luxembourg that saved multinational companies tens of billions of euros.
The European Commission president denied, however, that he was responsible for the controversial tax arrangements with companies such as Disney, Skype and Ikea. The revelations have put Juncker under pressure and triggered a censure vote in the European parliament, while UK MPs questioned this week whether he should remain in his post as the EU’s most powerful official. The European commission president denied, however, that he was responsible for the controversial tax arrangements with companies such as Disney, Skype and Ikea. The revelations have put Juncker under pressure and triggered a censure vote in the European parliament. UK MPs questioned this week whether he should remain in his post as the EU’s most powerful official.
Juncker told the Guardian: “I don’t feel damaged subjectively because I know what I did and I did not do. But I am not naive, not a village idiot, and I have to objectively take on board that many people in Europe now have doubts about the honourable side of the new commission president. I have to live with that.”Juncker told the Guardian: “I don’t feel damaged subjectively because I know what I did and I did not do. But I am not naive, not a village idiot, and I have to objectively take on board that many people in Europe now have doubts about the honourable side of the new commission president. I have to live with that.”
Following disclosures this week and last month in the Guardian and other newspapers of the agreements Luxembourg made with multinationals seeking to minimise their tax exposure in Europe, Juncker vehemently denied he was personally involved in the deals. He said he had frequently been in contact with and in negotiations with many of the big firms basing themselves in the Grand Duchy for tax reasons, but that he was not allowed to discuss the tax arrangements. Following disclosures this week and last month in the Guardian and other newspapers of the agreements Luxembourg made with multinationals seeking to minimise their tax exposure in Europe, Juncker vehemently denied he was personally involved in the deals. He said he had frequently been in contact and negotiations with many of the big firms basing themselves in the Grand Duchy for tax reasons, but that he was not allowed to discuss the tax arrangements.
Juncker was prime minister and finance minister of Luxembourg at the time and dominated the Grand Duchy’s politics for a generation. Last month he started a five-year term as commission president, one of the most powerful posts in the EU.Juncker was prime minister and finance minister of Luxembourg at the time and dominated the Grand Duchy’s politics for a generation. Last month he started a five-year term as commission president, one of the most powerful posts in the EU.
“I had contact with several, but not all of the firms mentioned,” he said in an Austrian television debate with the Guardian and other European publications. “But I never interfered in the special tax rulings because under the law a Luxembourg finance minister is not allowed to, he is not allowed to influence the form of a specific tax file.” “I had contact with several, but not all of the firms mentioned,” he said in an Austrian television debate with the Guardian and other European publications. “But I never interfered in the special tax rulings because under the law a Luxembourg finance minister is not allowed to. He is not allowed to influence the form of a specific tax file.”
Juncker argued 22 of 28 EU countries behaved similarly in granting tax concessions to the multinationals and that there was nothing special about Luxembourg. Critics and experts agree countries such as the UK, Ireland, and the Netherlands have been competing for business by bestowing favourable tax regimes on big firms but say that Luxembourg, the EU’s smallest country, operated on a different scale of magnitude.Juncker argued 22 of 28 EU countries behaved similarly in granting tax concessions to the multinationals and that there was nothing special about Luxembourg. Critics and experts agree countries such as the UK, Ireland, and the Netherlands have been competing for business by bestowing favourable tax regimes on big firms but say that Luxembourg, the EU’s smallest country, operated on a different scale of magnitude.
Juncker denied he was coming under pressure from his bigger neighbours. “No one in the [German] government has said they view me differently. These tax rulings are a phenomenon in all capitals. That’s well-known.” The commission headed by Juncker is currently investigating the deals Luxembourg struck with Amazon and a Fiat subsidiary. The Luxembourg government this week has repeatedly maintained that its tax rulings “are not and never have been secret”, although it has also attempted to withhold information from the commission investigators. Juncker denied he was coming under pressure from his bigger neighbours. “No one in the [German] government has said they view me differently. These tax rulings are a phenomenon in all capitals. That’s well-known.”
Juncker conceded he was involved in the negotiations with Amazon a decade ago, but denied those talks extended to tax matters, even though he said in 2003 that the factors that led to success with Amazon included “the right tax policy.” Diplomats and officials in Brussels say Juncker will be able to ride out the storm of indignation over the tax controversy. However, his political survival may hinge on whether there are further leaks of documents detailing how the Luxembourg authorities rubberstamped deals allowing firms to cut their tax payments to under 1% in some cases. The commission headed by Juncker is currently investigating the deals Luxembourg struck with Amazon and a Fiat subsidiary. The Luxembourg government this week has repeatedly maintained that its tax rulings “are not and never have been secret”, although it has also attempted to withhold information from the commission investigators.
Juncker presented himself as a champion of new and better tax arrangements in the EU and pledged new proposals would be tabled by the commission in the spring. He wanted more “harmonisation” of tax policies and “fair competition”. Public opinion on the issue had shifted, he said: “There is a strong marked desire for tax justice.” Juncker conceded that he was involved in the negotiations with Amazon a decade ago, but denied those talks extended to tax matters, even though he said in 2003 that the factors that led to success with Amazon included “the right tax policy.” Diplomats and officials in Brussels say Juncker will be able to ride out the storm of indignation over the tax controversy. However, his political survival may hinge on whether there are further leaks of documents detailing how the Luxembourg authorities rubberstamped deals allowing firms to cut their tax payments to under 1% in some cases.
Juncker presented himself as a champion of new and better tax arrangements in the EU and pledged new proposals would be tabled by the commission in the spring. He wanted more “harmonisation” of tax policies and “fair competition”. Public opinion on the issue had shifted, he said, adding: “There is a strong marked desire for tax justice.”