Disney and Skype ‘used Luxembourg tax deals’
Companies including Disney and Skype have allegedly used Luxembourg tax deals, according to fresh leaks published by investigative journalists.
The group of firms funnelled hundreds of millions of dollars in profits through Luxembourg subsidiaries, according to leaked documents.
Disney said the arrangement had “not meaningfully affected the taxes we pay”.
Microsoft, which owns Skype, said it “adheres carefully” to laws.
The European Commission is already conducting an inquiry into a number of companies’ tax arrangements, including online retail giant Amazon and carmaker Fiat.
Commission chief and Luxembourg ex-prime minister Jean-Claude Juncker “remains committed to the fight against tax evasion and to his presidency,” a Commission spokesperson said.
Mr Juncker has previously denied allegations he encouraged tax avoidance in Luxembourg.
Fresh additions to the thousands of so-called Luxleaks documents were published on Wednesday in a report by the International Consortium of Investigative Journalists (ICIJ).
Mr Juncker told French daily newspaper Liberation that he had been “weakened” by Luxleaks.
“Objectively, I have been weakened, because Luxleaks suggests that I participated in manoeuvres that don’t meet elementary rules of ethics and morality,” he said.
In November the Commission president faced a vote of no confidence over Luxembourg tax schemes, which he survived.
Documents relating to 35 new companies including Disney, Koch Industries, Skype and Hutchison Whampoa were added to data on hundreds of firms on Wednesday.
The deals in Luxembourg could have delivered huge tax savings, ICIJ said.
In some cases, companies enjoyed tax rates of less than 1% on profits moved into the country.
Disney established an inter-company bank in Luxembourg which then extended high-interest loans to operating affiliates in countries such as France, reducing their taxable income, the ICIJ said.
Disney said: “The report is deliberately misleading, Disney’s global tax rate has averaged 34% over the last five years. The ruling has not meaningfully affected the taxes we pay in any jurisdiction globally.”
Microsoft said: “Microsoft’s acquisition of Skype was finalised in October 2011, so we can only speak to activities after that date. Post-acquisition, we reviewed and modified Skype’s business model as part of the integration process.
“As a global business, Microsoft adheres carefully to the laws and regulations of every country in which we operate.”
Koch said: “Koch companies conduct their business lawfully and they pay taxes in accordance with applicable laws.”
Luxleaks has now included documents prepared by all of the Big Four accountancy firms: PricewaterhouseCoopers (PwC), EY, Deloitte and KPMG.
EY said that it “safeguards confidential client information” and provides “tax advice to clients in accordance with national and international law”.
“Professional standards, as well as privacy laws, require that EY safeguards confidential client information.
“We take these obligations very seriously and fully investigate any breach of confidentiality.
“Client confidentiality means that we are unable to comment on individual cases.”
At the beginning of December, PwC said: “The media reports on tax advice provided by PwC in Luxembourg and co-ordinated by the International Consortium of Investigative Journalists (ICIJ) are based on partial, incomplete information, which was illegally obtained.”
“All our advice and assistance is given in accordance with applicable local, European and international tax laws and agreements,” it added.
Deloitte said: “We are bound by and work in accordance with the complex laws and regulations created by governments as we assist our clients in effectively managing their tax affairs.
“We also apply a strict code of conduct that ensures ethical safeguards in the work we do for our clients.
“Most EU member states, including Luxembourg, make it possible to obtain an advanced analysis, by tax authorities, of specific contemplated tax transactions to provide legal certainty and predictability for both the taxpayer and the state through confirmation of the application of existing national and international tax laws.
“Professional standards preclude us from commenting on client matters.”
KPMG said: “KPMG International has a comprehensive, robust and publicly available global code of conduct setting the standards of ethical conduct for everyone at KPMG member firms.
Tax professionals are also subject to KPMG’s global tax principles, which set out additional fundamental ethical principles and behaviours.
The code and principles clearly state that we should act lawfully and with integrity and expect the same from our people, clients and other parties with whom we work.”