BRUSSELS
The European Commission responded Thursday to a media report alleging broad corporate tax avoidance in Luxembourg.
The report by the International Consortium of Investigative Journalists recounted alleged tax deals, sharply reduced assessments and other sensitive documents relating to more than 1,000 businesses, including Ikea, Deutsche Bank and Pepsi.
In reply to the report, a Commission spokesman pointed out that an investigation had already been underway into Luxembourg tax practice.
"The Commission is acting already," spokesman Margaritis Schinas said at a news briefing today.
On Oct. 7 the European Commission announced it had launched formal investigations into potential illegal state aid given by Luxembourg to Amazon and Fiat Finance & Trade.
''I cannot comment on on-going investigation cases as we cannot prejudge the outcome of the investigations,'' Margrethe Vestager, commissioner for competition, said in a statement Thursday.
But the commission is broadening its investigation into tax practice at member states, which have allegedly allowed multinational firms to avoid taxation.
Schinas said the commission had requested information from seven member states about tax practices. The targets of the investigation are Belgium, the Greek Cypriot administration, Ireland, Luxembourg, Malta, the Netherlands and Britain. The commission has also opened four in-depth investigations in three member states, Ireland, Luxembourg and Malta, Schinas added.
Luxembourg’s tax practice investigation is a blow to its former Prime Minister Jean-Claude Juncker, who took office as the new president of the European Commission on Nov.1. There are allegations that Juncker knew about the tax breaks.
Schinas also explained that Juncker would not take any role in investigations of Luxembourg, but he said Juncker would not abstain from a vote taken by the entire commission that involved a Luxembourg tax deal. "Mr Juncker is the president of the Commission. He cannot abstain on something that he presides over," Schinas said.
On June 11, European regulators launched inquiries into tax practices of Apple, Starbucks and Fiat, on the basis that these companies allegedly negotiated ''illegal'' deals with the governments in Ireland, the Netherlands and Luxembourg. Former commissioner for competition, Joaquín Almunia, called for a restraint on corporate tax planning and said all multinational companies have to 'pay their fair share.'
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