Economy & Politics

Tax evasion, Luxembourg’s weak point

The European Commission has reminded the Grand Duchy of its obligation to crack down on aggressive strategies to circumvent tax as part of its annual review of coordination of European policies.

The European Commission has reminded the Grand Duchy of its obligation to crack down on aggressive strategies to circumvent tax as part of its annual review of coordination of European policies.

(Jmh with Julie Edde) – In the area of ​​tax evasion, the Commission is strengthening its discourse vis-à-vis the member states deemed not to be sufficiently proactive. Including Luxembourg. In its annual review of European policy coordination, published on May 20, the European executive called on the government to “step up its efforts to tackle the features of the tax system that facilitate aggressive tax planning”.

In other words, to implement faster the international rules intended to prevent the implementation of aggressive tax strategies of companies intended to profit from a lower tax rate, even a tax exemption, compared to entities established abroad. Another recommendation from Brussels is the application of measures to effectively combat money laundering in the administrative services sector in the fund sector.


For Pascal Saint-Amans of the OECD, the covid-19 crisis will have consequences on international taxation. And therefore on the Grand Duchy and its financial center.


This is not the first time that the Commission has openly criticized Luxembourg for its tax system or its policy against money laundering, but these remarks are part of a desired acceleration at international level. “Over the past five years, Luxembourg has been fully committed to the global fight against tax fraud and tax evasion, and has actively participated in the EU’s efforts for more tax transparency,” says a spokesperson. from the Ministry of Finance, contacted by our colleagues from LuxTimes.

As a reminder, last March, the government tabled a bill aimed at limiting tax advantages, notably relating to the royalty intended for countries appearing on the black list of EU tax havens. Finally, it should be noted that the recommendations issued by the Commission are based on the recommendations published last February in the conclusions on the general condition of all the member states. A report which must now be adopted by the European Council, a body made up of all the heads of state and government of the 27.


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