Juncker defends handling of Luxembourg tax regime while PM

European Commission president Jean-Claude Juncker has defended his handling of his country's tax regime while prime minister of Luxembourg ahead of a vote of no-confidence in the European Commission in Strasbourg.

Seventy-six of the European Parliament’s 751 MEPs tabled a censure motion on the new European Commission last week in the wake of the “LuxLeaks” scandal, which revealed that more than 340 companies cut their tax bills through tax rulings with Luxembourg while Mr Juncker was prime minister.

But with the main political groups in the European Parliament backing Mr Juncker and his commission, it is unlikely that critics will command the two-thirds majority needed to pass the motion.

Addressing the parliament in Strasbourg during a specially convened debate on the issue, Mr Juncker told MEPs that he was not solely responsible for the tax regimes that were in place in Luxembourg during his premiership.

Tax competition

“I didn’t put this together but it’s the result of the arrangements made in our member states,” he said. Flanked by his team of commissioners, Mr Juncker criticised a number of MEPs for referring to a “Juncker system” of taxation.

“What entitles you to do that?” the European Commission president said. “It is actually the outcome of tax arrangements made by member states throughout Europe . . . I’m not against tax competition. I’m against unfair tax competition, however. My commission will work flat out to combat that.”

Mr Juncker, who earlier this month announced plans to revive the Common Consolidated Corporate Tax Base (CCCTB) and introduce a directive which would comply all member states to share information regarding tax rulings, told the plenary session of the European Parliament that his commission was committed to tackling tax evasion.

Consensus

“We want to ensure that it will be impossible for people to escape taxation. We will have proper ethics and morals in place to ensure that is the case,” he said.

“It’s not good enough to call on me, the commission, to [tackle tax evasion]. We need to ensure that there is general consensus around this idea in all of the member states.”

Mr Juncker concluded his closing address by asking MEPs to “stop insulting” him. “I may be thick-skinned, you can cast aspersions on me, but I’d rather get on with the job.”

The European Commission is due to sign off on Mr Juncker’s investment plan for Europe on Tuesday before Mr Juncker presents the package to the European Parliament.

It is understood the plan is built around a €21 billion fund, which will compriseEU funds and European Investment Bank money. This will be used to leverage private funding for public investment projects.