As the Tax Justice Network has reported this afternoon, Luxembourg has failed its second stage OECD Global Forum review because of serious and systemic regulatory failures. BVI, the Seychelles and Cyprus have also failed. Switzerland has failed to make it far enough through the process to fail, as yet.
As TJN also says, this is despite the appallingly low standards expected by the OECD that lets so many tax havens completely off the hook.
But let's put this in context: Luxembourg is the main entry point for multinational company foreign direct investment in Europe and it has failed regulatory standards. Is that coincidence or the reason why MNCs favour it so strongly.
You decide.
I know what I think.
And guess who dominates the tax abuse market in Luxembourg? Why, the Big 4 accountants, of course.
Again, I see no coincidence.
It's time for the EU to act on this one. If the 'common market' is to mean anything rooting out abuse has to be a part of its role. Start with Luxembourg.
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OK I agree, but if Luxembourg did not exist, don’t you think some other country would take up the baton?
No
Not now
It would have done
But not now
Let’s start from where we are
Not where we were
Originally Luxembourg took up the baton from Netherlands when Netherlands started to fall out of favour – from memory that was late 1990’s / early 2000’s.
Basically you could get (and I assume still can) extremely favourable rulings from the Luxembourg tax authorities, which had ceased to be the case in Netherlands.
Luxembourg Swiss branch routes gave a double benefit of favourable rulings from both Swiss and Luxembourg – remember the Vodafone CFC case re Luxembourg/Switzerland – which was set up around 2000’ish.
Obviously time has moved on and if Luxembourg dropped the baton now, I agree with Richard, it is less likely someone else would pick it up.
Luxembourg has been at this since at least 1929
It’s not new
Maybe more widely used though
Please note that the political parties negotiating the new government policies have recruited Mr. Kinsch, Country managing partner of E&Y in Luxembourg to bring his expertise to the new fiscal policy to be adopted by the new government.