Luxembourg leaks shine spotlight on global tax schemes

HUNDREDS of international companies have secured secret deals with Luxembourg that drastically reduce their tax bills, media reports have revealed.

HUNDREDS of international companies have secured secret deals with Luxembourg that drastically reduce their tax bills, a review of almost 28,000 leaked confidential documents by The International Consortium of Investigative Journalists reports.

According to the ICIJ’s review of the documents, companies such as Pepsi, Ikea and FedEx appear to have channelled funds through Luxembourg to minimise their tax bills, while maintaining only a slight presence in the European city state.

Some of the leaked documents reportedly show companies enjoying an effective tax rate of less than 1 per cent on profits funnelled into Luxembourg.

The involvement of PricewaterhouseCoopers in the tax arrangements has also been widely reported, with many of the leaked documents bearing the accounting firm’s name and showing it devised strategies for its clients to minimise tax payments.

Among the local companies implicated in the leaked documents are AMP, Macquarie Group, Lend Lease, Goodman Group and The Future Fund.

Australian Tax Commissioner Chris Jordan told Fairfax Media the ATO would be checking the leaked documents to ensure they corresponded with the information provided to the Tax Office by the companies.

“I have written to our tax treaty ­partners, inviting their collaboration in joint investigation of this data to understand any tax risks and to explore opportunities for joint com­pliance approaches,” he said.