05/04/22

LUXEMBOURG: Vestager acknowledges jurisdiction’s efforts on tax rulings.

As published on delano.lu, Tuesday 5 April, 2022.

EU Commission vice-president Margarethe Vestager was in the grand duchy on Monday and addressed tax rulings and moves to a global minimum corporate tax as well as the war in Ukraine.

Margarethe Vestager’s one-day visit to Luxembourg on Monday included an address to the Chamber of Deputies, an exchange of views with prime minister Xavier Bettel and a meeting with leadership at the European Investment Bank.

The EU Commission vice-president is in charge of the competition portfolio and also chairs the Commission’s group on “Europe Fit for the Digital Age”.

During her address to parliament Vestager talked about the roll out of 5G, for example, had been but she also added that she thought Luxembourg was advanced in terms of digitalization compared to the EU average. MPs also heard her discuss the digital markets act, the need to strengthen cybersecurity and what she called the “delayed” deployment of 5G technology in Europe.

Vestager said that war in Ukraine was transforming the European Union in terms of showcasing the need for unity to deal not only with that crisis, but also in managing other major challenges such as digital transition and climate change. We need to duplicate our efforts to manage these challenges in parallel, she said.

Asked about the possibility of new sanctions including measures on the import of gas from Russia, Vestager said that “everything was on the table.” Any new package of sanctions should, however, be supported by all EU members--there is currently some division on the issue of gas imports--to ensure that they are “truly effective,” said the Commissioner.

At a press conference following her meeting inside the chamber, Vestager also addressed the issues of competition and in particular tax rulings. “What we have seen is that… a number of countries have changed their laws on tax rulings…and that is a good thing,” Vestager said, citing Luxembourg, alongside Ireland and Cyprus and Malta as examples. But the commissioner also said that this had not been properly acknowledged in Europe.

Vestager was also asked about proposals emerging from the OECD/G20/Inclusive Framework to introduce a 15% global corporate rate on all multinational groups exceeding a threshold of €750 million of combined financial revenues.

“I think it’s a really balanced approach. It works for the business community, but it also works for the countries,” she said. The majority of companies pay their taxes, and the new global rate would ensure that not only small businesses, but all businesses pay their contribution, Vestager concluded.