Juncker insists he acted within law on ‘Lux leaks’ agreements

Almost a week after the Luxembourg Leaks scandal revealed that 343 companies reduced their tax bills through agreements with Luxembourg, the man who was Prime Minister at the time gave his first public response to the controversy yesterday.

At a surprise appearance before the media in Brussels, European Commission President Jean-Claude Juncker insisted that he had acted within national and international law when the tax agreements were struck, adding that he had "worked for more fiscal harmonisation" throughout his life.

While “some reasonable and perfectly understandable questions” had been raised on the Lux leaks scandal, he said that there was no conflict of interest in his position as European Commission president.

“We have a Commissioner for Competition who now has a great deal of independence . . . it has always been the rule in the Commission that commissioners that come from a certain member state don’t give an opinion on cases on competition that are relevant for their own member state.”

Mr Juncker, who flew to Brisbane last night to represent the European Commission at the G20 summit, also participated in a debate at the European Parliament yesterday afternoon, telling MEPs that the tax rulings offered by Luxembourg were in line with EU rules.

"The tax laws were always respected. There were no illegal practices that took place. There was probably a certain amount of avoidance in Luxembourg as in other countries," he told the Parliament. He added that tax rulings exist in 22 member states of the European Union, noting that it was "not a particular characteristic of Luxembourg."

Mr Juncker appeared to win the support of the majority of MEPs last night.

Manfred Weber, President of the European People's Party (EPP) of which Mr Juncker is a member, told the Chamber that it was not the EU that had failed, but member states themselves who have made no efforts to harmonise their corporate tax bases. "We need transparency on national tax rulings as well as harmonised tax bases," he said.

The head of the Socialists and Democrats group in Parliament, which supported Mr Juncker’s nomination for European Commission as part of an informal coalition with the EPP, said that he felt “indignation for people hurt by big companies that don’t pay taxes where profits are made.”

Mr Juncker yesterday underlined the Commission’s commitment to fighting tax evasion and avoidance, pledging to introduce automatic exchange of information rules for tax rulings offered by countries, and vowing to progress legislation on the controversial Common Consolidated Corporate Tax Base.

Mr Juncker expressed confidence that all 28 member states would back his plans, but indicated that the proposals depended on unanimity from member states.