Luxembourg’s Bettel opposes fiscal standardisation
Luxembourg’s Prime Minister has spoken out against a harmonsiation of tax within the EU, arguing that it should be left to member states to decide.
Xavier Bettel was quoted in an interview published by Belgian daily L’Echo on Wednesday, following the Lux Leaks scandal in which tax agreements between the Luxembourg state and multinationals were revealed.
Mr Bettel defended the right to apply different direct and indirect taxation in Europe, going against statements made by European Commission chief and former Luxembourg Premier Jean-Claude Juncker that tax should be standardised to fight fiscal dumping.
“I certainly do not intend to introduce higher tax in Luxembourg. To say that everyone within the EU should move towards a single tax and the same tax rate, I’m against it,” Bettel was quoted as saying, adding: “It is a competence that is the responsibility of member states. “
The leader went on to say that the debate should not be about granting the same tax treatment to everyone but about knowing “who does what”.
He also defended the system of “tax ruling” practised by Luxembourg, noting that 22 European states have recourse. He even suggested that the tax team, which deals with tax administration in Luxembourg, could be expanded because of the “volume of work involved.”
Tax rulings allow a company to ask in advance how their tax situation will be dealt with in a country, and are used by multinationals to optimise taxation by allocating their costs and benefits between subsidiaries in different countries.
In an interview with French business daily Les Echos also published on Wednesday, the European Commissioner for Taxation, Pierre Moscovici promised a European directive on the automatic exchange of information to be ready “early 2015”.
In a rallying cry at the G20 on Sunday, in his final statement he called on people to win the fight against tax optimisation in 2015, in particular on “transparency on tax rulings which are considered harmful practices.”
