Some of Luxembourg’s tax dealings with multinationals have been made public through the disclosure of the Lux Leaks documents Shutterstock

Some of Luxembourg’s tax dealings with multinationals have been made public through the disclosure of the Lux Leaks documents Shutterstock

The International Monetary Fund report examines the impact of tax havens on global tax revenues, in line with the commission’s agenda.

Its authors found that at $4 trillion, the scale of foreign direct investment in Luxembourg was on a par with that of the US and higher than that of China.

“FDI of this size hardly reflects brick-and-mortar investments in the minuscule Luxembourg economy,” the IMF report says. The author alleged that much of this investment goes into “empty corporate shells”, established to reduce tax revenues.

It was the timing of the discussions between commission vice president Margrethe Vestager, tax commissioner Paolo Gentiloni and IMF researchers that caught Reuters’ attention, coming as it does days after the departure of former Luxembourg prime minister Jean-Claude Juncker as commission president.

Reuters cites criticism from EU lawmakers that during his time in office, the commission set up a tax haven blacklist that exempted its 28 member states from screening.

Some of Luxembourg’s tax dealings with multinationals have been made public through the disclosure of the LuxLeaks documents. A number of these dealings have been investigated by the European Commission, in some instances leading to the firms being asked to pay back taxes, for instance in the recent case of Fiat Finance and Trade.