BRUSSELS: Luxembourg’s competitive tax rules hit the headlines on Monday, triggering renewed allegations that lax laws make it a haven for billionaires, mafia bosses and profit-shifting big businesses.
According to the “OpenLux” investigation — published by Le Monde, Süddeutsche Zeitung and 15 other media outlets — there are 140,000 active companies, funds and foundations, one for every four Luxembourgers.
But the true owners of only half of them are known, the report said, and nine out of ten registered companies are owned by non-residents hailing from France, Belgium, Germany and beyond.
The report said the register contains several “questionable figures as company owners” such as an arms dealer, a Russian crime boss or people connected to the Italian mafia organisation ‘Ndrangheta.
Luxembourg’s government shot back with a pre-prepared news release and ambitious web site accusing the authors of “a series of unfounded allegations about the Luxembourg economy and financial centre. “Luxembourg’s legislation is in full compliance with all EU and international regulations,” it said. The small EU country was hit with a major tax scandal in 2014 when a consortium of international journalists exposed sweetheart deals given multinationals that chose it as a tax base.
The scandal led to several reforms including a law in 2018 that forced EU nations to open a public registry revealing the true beneficiaries of shell companies.
It is this register of beneficial owners that served as the basis for the investigation, in which investigative journalists compiled public information in a searchable format.
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