Advertisement

We need your help now

Support from readers like you keeps The Journal open.

You are visiting us because we have something you value. Independent, unbiased news that tells the truth. Advertising revenue goes some way to support our mission, but this year it has not been enough.

If you've seen value in our reporting, please contribute what you can, so we can continue to produce accurate and meaningful journalism. For everyone who needs it.

AP/Press Association Images

Walt Disney paid less than 1% tax on its billion-dollar profits: Luxleaks

Pressure is mounting on European Commission President Jean-Claude Juncker.

Updated at 5.23pm

EU COMMISSION CHIEF Jean-Claude Juncker vowed today to fight tax avoidance in Europe after new revelations showed Disney, Microsoft and Koch Industries got bumper tax deals from Luxembourg when he was prime minister.

They were among dozens of companies dragged into the Luxembourg tax avoidance “Luxleaks” scandal with the release of a new wave of documents by investigative journalists.

The revelations, including that entertainment giant Disney, the home of Mickey Mouse, paid just over a quarter of one percent in tax on over €1 billion in profits funnelled through the tiny duchy, increase pressure on Juncker over Luxembourg’s tax policies during his 19 years in office.

As he arrived in Luxembourg for his official swearing in after taking the helm at the Commission in November, Juncker reiterated that tackling tax avoidance had been one of his campaign promises earlier this year.

For tax harmonisation, the coordination and bringing together of tax policies is an absolute necessity. I will do it,” Juncker said.

But Juncker, who turned 60 on Tuesday, hinted that the scandal was being used as a way to attack him in his first weeks in the job, saying that the timing of the leaks was “not a coincidence”.

In an interview published earlier today, Juncker said he had been “weakened” by the scandal but repeated his insistence that he was not personally involved in the deals for major corporations.

Secret deals to dodge billions in tax

The first instalment of Luxleaks documents in November revealed that hundreds of the world’s biggest companies brokered secret deals with Luxembourg to avoid paying billions of dollars in taxes.

The new claims emerge from 28,000 pages of documents obtained by the International Consortium of Investigative Journalists (ICIJ) and examined by dozens of newspapers.

They detail “aggressive tax structures” brokered for major companies by accountants Ernst & Young, KPMG, PwC and Deloitte between 2003 and 2011.

The reports say Internet calling business Skype, owned by Microsoft, used an Irish subsidiary to allow its Luxembourg unit to report no corporate tax over five years.

Meanwhile, Koch Industries – owned by the powerful US conservative political donors the Koch brothers – and the Walt Disney Company had complex arrangements to channel “hundreds of millions of dollars in profits through Luxembourg” from 2009 to 2013 and pay little tax, the ICIJ said.

Canadian aerospace giant Bombardier and communications firm Telecom Italia are also named in the documents, according to Belgian newspaper Le Soir, which reported that Disney was afforded a 0.28 percent tax rate in the arrangements.

British newspaper The Guardian reported that the new documents name major consumer goods company Reckitt Benckiser and Lycra company Invista, owned by the Koch brothers.

A six-month deadline

Juncker easily survived a vote of confidence in the European Parliament in November over Luxleaks, in which he had the backing of his own centre-right group, plus the rival socialists.

Belgium EU Commission European Commission President Jean-Claude Juncker Geert Vanden Wijngaert / AP/Press Association Images Geert Vanden Wijngaert / AP/Press Association Images / AP/Press Association Images

But when asked today if the socialists might now withdraw their confidence, leader Gianni Pittella gave Juncker six months to come up with proposals to settle the tax avoidance problem.

The trust we’ve instilled in him is not a blank check. It is conditional on his actions,” Pittella said.

Commission spokesman Ricardo Cardoso said Juncker would not stand down.

The November leaks, which named companies including Apple, Pepsi, IKEA and Heinz as tax breaks beneficiaries while Juncker was prime minister, hit less than a week after he took office at the head of the European Commission.

The European Commission has fought back on the issue, announcing agreements on Tuesday to close loopholes and to ensure the exchange of tax information between the EU’s 28 member states.

Since June, the commission has also launched investigations into the tax affairs of Amazon and Fiat in Luxembourg, Apple in Ireland and Starbucks in The Netherlands to determine whether sweetheart tax deals could constitute illegal state aid.

READ: Ireland is getting ‘kicked around’ by big European countries on tax: Hayes >

READ: Double Irish? Peh, global brands used Luxembourg to avoid billions in tax >

Author
View 17 comments
Close
17 Comments
    Install the app to use these features.
    Mute Trevor Weafer
    Favourite Trevor Weafer
    Report
    Dec 10th 2014, 8:50 AM

    Is anyone surprised? Meanwhile we are ba$tardised for our low corporation tax. What a joke.

    246
    Install the app to use these features.
    Mute SMcB
    Favourite SMcB
    Report
    Dec 10th 2014, 11:15 PM

    All it show is the sort of man Juncker is… A hollowed out man.

    16
    Install the app to use these features.
    Mute Lynne
    Favourite Lynne
    Report
    Dec 10th 2014, 10:30 AM

    Why is this story not getting more high profile coverage? It’s a massive story and deserves far more coverage than it has been getting of late.

    134
    Install the app to use these features.
    Mute Neal Ireland Hello
    Favourite Neal Ireland Hello
    Report
    Dec 10th 2014, 6:02 PM

    Because it’s boring as hell. Accountancy news isn’t all that sexy, no matter how much you may want it to be.

    23
    Install the app to use these features.
    Mute Chris
    Favourite Chris
    Report
    Dec 10th 2014, 8:54 AM

    The whole of Europe is corrupt it’s time to break up this union and jail all these criminals

    123
    Install the app to use these features.
    Mute Diarmuid
    Favourite Diarmuid
    Report
    Dec 10th 2014, 8:47 AM

    Koch Industries are major contributors to the Tea Party and right wing US Republican candidates.. they’ll be protected on the US side of the Atlantic at least.

    81
    Install the app to use these features.
    Mute Eoin O'Neill
    Favourite Eoin O'Neill
    Report
    Dec 11th 2014, 1:00 AM

    The Koch brothers have massive clout in the republican party and effectively have them in there pockets.

    6
    Install the app to use these features.
    Mute Felix Williams
    Favourite Felix Williams
    Report
    Dec 10th 2014, 5:43 PM

    “EU COMMISSION CHIEF Jean-Claude Juncker vowed today to fight tax avoidance in Europe after new revelations showed Disney, Microsoft and Koch Industries got bumper tax deals from Luxembourg when he was prime minister.”

    Pot calling kettle black???

    80
    Install the app to use these features.
    Mute John B
    Favourite John B
    Report
    Dec 10th 2014, 7:11 PM

    Exactly. To rephrase Juncker : “shame on me for turning a blind eye to tax fraud”

    27
    Install the app to use these features.
    Mute Darren Norris
    Favourite Darren Norris
    Report
    Dec 10th 2014, 5:57 PM

    It looks like Ireland has the highest tax take lately, yet the big lads in Europe continue to bully us to take the focus away. “% for car makers in France, and now this in Luxembourg.

    Not to mention cheap shipping in Greece, tax deals in Holland and the UK and secret banking deals in Malta.

    54
    Install the app to use these features.
    Mute Mike
    Favourite Mike
    Report
    Dec 10th 2014, 6:15 PM

    Many Tax deals done in the city of London since the 80s.

    25
    Install the app to use these features.
    Mute Murph11
    Favourite Murph11
    Report
    Dec 10th 2014, 5:28 PM

    They have to be taking the Mickey

    36
    Install the app to use these features.
    Mute Bobby Fox
    Favourite Bobby Fox
    Report
    Dec 10th 2014, 5:59 PM

    Seems like the corporations are taking over.One solution would be to pay tax where money is made.Pity stupid fine Gael and Cameron are against the Tobin tax.how could junker think he was fit to be commission President?

    26
    Install the app to use these features.
    Mute Colin Moran
    Favourite Colin Moran
    Report
    Dec 10th 2014, 5:40 PM

    It’s clearly a Mickey Mouse system.

    23
    Install the app to use these features.
    Mute Ciaran Coye
    Favourite Ciaran Coye
    Report
    Dec 10th 2014, 8:27 PM

    In fairness to Ming, he’s been on juncker’s case since he went to Brussels.

    15
    Install the app to use these features.
    Mute Silver Fox
    Favourite Silver Fox
    Report
    Dec 10th 2014, 9:45 PM

    Time to bring back ‘Woodstock’
    Smoke drugs, make love and feck em all. Why is average working class citizen still working for peanuts and being taxed to the hilt ? It’s going to wear thin soon. Democracy – hypocrisy!

    9
    Install the app to use these features.
    Mute Paul Roche
    Favourite Paul Roche
    Report
    Dec 10th 2014, 9:23 PM

    Keep these stories coming Phil, pretty soon you’ll make it to the top.
    The Hogan Commission does have a nice ring to it.

    6
Submit a report
Please help us understand how this comment violates our community guidelines.
Thank you for the feedback
Your feedback has been sent to our team for review.
JournalTv
News in 60 seconds