There are a lot of tax havens in Europe. But they pale against the City of London.
By Don Quijones, freelance writer, translator in Barcelona, Spain. Editor at WOLF STREET. Mexico is his country-in-law. Raging Bull-Shit is his modest attempt to scrub away the lathers of soft soap peddled by political and business leaders and their loyal mainstream media. This article is a Wolf Street exclusive.
For a tiny country of just 500,000 inhabitants, the Grand Duchy of Luxembourg is getting a heck of a lot of international attention these days. And certainly not of the welcome kind. At the beginning of this week, the Washington-based International Consortium of Investigative Journalists (ICIJ) published tens of thousands of documents that finally shed light on one of the world’s most important and most secretive tax havens – at least until now.
The picture that emerges is one of endemic tax avoidance and evasion that has helped transform Luxembourg into the world’s richest country on a per capita basis. The country also boasts the world’s highest ratio of bankers to inhabitants – a staggering 1:21.
Thanks to the revelations, we have learned that:
Hundreds of European and global transnationals, including Accenture (the former auditing arm of Arthur Andersen), IKEA, Burberry, FedEx, Blackstone, Deutsche Bank, H. J. Heinz, JP Morgan Chase, Procter & Gamble and HSBC, have signed sweetheart deals (endearingly titled comfort letters) with Luxembourg’s tax authorities that effectively allow them to avoid taxes in the countries where they rack up their profits. In some cases they have paid tax on profits of just 1%.
This post was published at Wolf Street by Don Quijones ‘ November 8, 2014.