Bershidsky, Leonid, (2017), “Europe’s Tax Competition Is Unfair and Inefficient”, Bloomberg, 31 May
Juncker’s “see no evil, hear no evil” testimony was an extension of the LuxLeaks scandal that first broke in 2014. It transpired that more than 300 global companies, including Pepsi, McDonalds, Deutsche Bank and Amazon, had secured individual, secret tax rulings in the Grand Duchy. The scandal was huge, but its consequences haven’t lived up to the hype. Luxembourg codified its tax-ruling procedure, making it theoretically more transparent, but it hasn’t stopped issuing the rulings. McDonalds moved its European tax headquarters to the U.K., but there have been no other high-profile departures. Amazon recently won a major court victory over the U.S. Internal Revenue Service, which had challenged its Luxembourg-based tax scheme. The effective tax rates of the companies in question haven’t gone up. (The whistle-blowers haven’t been so lucky: Luxembourg courts have sentenced the PricewaterhouseCoopers employees who had exposed the secret tax rulings.)
Relevant Posts
- Douglas, Roger, MacCulloch, Robert, (2017), «Welfare: Savings not taxation», Vox Eu, 25 May
- Petroulakis, Filippos, (2017), «Internal devaluation in currency unions: the role of trade costs and taxes», European Central Bank Working Paper Series No 2049, April