Luxembourg Leaks, Image: Tim Meko / Shutterstock

Millions in taxes lost through Luxembourg

"Jean-Claude Juncker helped build this system"
2:49 min

Swedish Radio News reports that the tax authorities in Luxembourg have helped hundreds of Swedish and other companies avoid paying taxes in their home countries.

The revelation is based on thousands of secret documents uncovered by the International Consortium of Investigative Journalists.

Professor Roger Persson-Österman of Stockholm University, an expert in international tax laws, says this reinforces the image of the tiny Grand Duchy in the heart of the EU as a tax haven. “Now there’s a lot of evidence that this is the case,” he tells Swediush Radio News. “Now we have it in black and white.”

The ICIJ has gone through 28,000 documents from Luxembourg’s tax authorities, mostly for the period 2008 to 2010. They cover around 340 companies, and besides international concerns like Pepsi, a number of Swedish companies are involved, including the furniture giant Ikea and several private equity firms. Klas Tikkanen, Chief Financial Officer at Nordic Capital, has confirmed they had help from Luxembourg to reduce their Swedish taxes.

“Yes, that’s right,” he tells Swedish Radio News “If you go back in time, this is the way some companies reduced their Swedish corporate taxes. But,” he says, “we don’t do that way anymore.”

One reason the tax dodge is no longer as attractive, Swedish Radio News says, is that Swedish law has changed, making it more difficult for companies to take deductions for loans between parts of the same concern.

One concern about the revelations is the apparent involvement of the tax authorities in Luxembourg in helping companies avoid paying taxes in their homelands.

Tax professor Roger Persson-Österman says this kind of behavior wouldn’t be permitted in Sweden. “From a Swedish perspective,” he says. “This is very strange behavior.”

The revelation has also cast doubts about the new president of the European Commission, Jean-Claude Juncker, who was Luxembourg’s Finance Minister. Jonas Sjöstedt, head of Sweden’s Left Party, wants his party’s group at the European Parliament to introduce a vote of no confidence against Juncker.

Meanwhile, Swedish Green MEP Peter Eriksson is also critical and is calling on the commission to take action against tax havens. “Jean-Claude Juncker has helped build this system in Luxembourg,” Eriksson tells Swedish Radio News. “So if the new commission doesn’t act strongly, they won’t be able to build confidence they need to act effectively.”

Our journalism is based on credibility and impartiality. Swedish Radio is independent and not affiliated to any political, religious, financial, public or private interests.
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