The European Commission challenged tax rulings and ordered Luxembourg to recover €20-€30 m from Fiat Finance & Trade and €120 from Engie (formerly GDF Suez)
Photo: Maison moderne/archives
Luxembourg’s contested tax rulings with Fiat and Engie may be legal but their legitimacy has been put in question by the country’s tax justice defenders.
Responding to finance minister Pierre Gramegna’s claim that the European Commission’s challenge against the rulings was “not justified”, Magali Paulus of “Collectif Tax Justice Lëtzebuerg” told Delano: “Although the tax rulings attributed to Fiat and Engie might be legal they for sure are not legitimate. If citizens contribute to the functioning of our society and country by paying their taxes so should multinational companies.”
The European Commission ordered Luxembourg to recover €20-€30 m from Fiat Finance & Trade and €120 from Engie (formerly GDF Suez), related to a 10-year period of back taxes.
Luxembourg is appealing the Fiat case at the court of justice of the European Union.
Gramegna said on Tuesday that the forced recovery from Fiat was “not justified”. “This sum is supposed to correspond to the tax receipts if the tax ruling had not be in place.”
The minister also contested the Engie decision saying it would “harm Luxembourg’s reputation by questioning the legality of the tax scheme granted to the company.”
The international community has adopted a global framework for the creation of just, peaceful and inclusive societies in the 2030 agenda for sustainable development. “To reach this objective, all individuals and companies must understand that paying tax is an investment into society as a whole,” Paulus said, adding: “Luxembourg wants and should to be a champion in promoting and implementing the 2030 agenda, therefore we lament the Luxembourgish government's defense in front of the European Union Court of Justice in the Fiat and Engie cases.”
The spokeswoman urged for a speeding up of steps to increase transparency, for example through the creation of public registries on beneficiary ownership of firms.
“Country-by-country reporting of activities and tax paid by multinational companies should be publicly accessible. Those financial institutions who collaborate in tax evasion or capital fight should be sanctioned,” she said.