Tax haven Luxembourg Detail

About Tax haven Luxembourg Detail

Luxembourgs tax haven status dates to the 1929 holding company regime, which exempted holding companies from income tax on dividends and capital gains. Luxembourg developed sophisticated tax ruling practices, providing multinational companies with certainty about their tax treatment. The LuxLeaks revelations in 2014 exposed over 300 companies using Luxembourg tax rulings. Companies including Apple, Amazon, IKEA, Pepsi, and FedEx used Luxembourg structures to reduce effective tax rates to under 1 percent. Jean Claude Juncker, Prime Minister of Luxembourg during much of this period, became President of the European Commission in 2014, creating awkwardness. Luxembourg reformed some practices after LuxLeaks but remains an important financial center. The OECD BEPS project and EU anti avoidance directives have reduced but not eliminated the use of Luxembourg for tax planning.