Berlin takes aim at Luxembourg tax deals

Berlin has taken a swipe at the new head of the European Commission by questioning the fairness of hundreds of controversial tax deals struck while Jean-Claude Juncker was still Luxembourg’s prime minister.

The criticism from Wolfgang Schäuble, Germany’s powerful finance minister, came as Mr Juncker – who served as Luxembourg’s prime minister for 18 years until 2013 – took his first public steps to stem a rising furore that is overshadowing his early days as commission president.

Mr Juncker was met with a mixture of applause, boos and shouts of “resign” when he appeared before the European parliament on Wednesday, just two weeks into his new role. He made his first public remarks on the affair since it erupted a week ago with the leak of 28,000 pages of confidential tax documents, saying he was not responsible for Luxembourg’s tax regime despite his long tenure at the head of its government. For many of those years, Mr Juncker also served as finance minister.

He has agreed to draw up rules that would require countries including Luxembourg to share details of corporate tax deals with other EU governments – something Mr Schäuble has been seeking.

“I am not the architect of the Luxembourgish model,” he said, adding that the Grand Duchy’s tax authority had acted on an “autonomous basis” with little oversight from the government. But he conceded he was “politically” responsible for the affair.

The disclosure of arrangements in Luxembourg that saw more than 340 companies cut their tax bills to as little as 1 per cent has threatened to create a political storm, with some MEPs demanding a special committee to investigate EU tax havens and others gathering signatures for a motion to censure the commission president.

Although Mr Schäuble did not criticise the commission president by name, the German finance minister took issue with the Grand Duchy’s tax policies over decades. “Not everything that is legally possible corresponds to the need for fairness,” Mr Schäuble said.

Lees verder op de Financial Times