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International Accounting And Multinational Enterprises, 6th Edition.rar

The LuxLeaks' disclosures attracted international attention and comment about tax avoidance schemes in Luxembourg and elsewhere.[1] This scandal contributed to the implementation of measures aiming at reducing tax dumping and regulating tax avoidance schemes beneficial to multinational companies.

International Accounting and Multinational Enterprises, 6th Edition.rar

Tax rulings are set up by large accounting firms (the "Big Four") for the benefits of their clients, multinational companies, and then approved by the Luxembourgish tax administration. Tax rulings include schemes to transfer revenues to Luxembourg. Transfer pricing is one of the mechanisms used by multinational corporations to reallocate profits. Intragroup loans are another possible mechanism: a company based in a high-tax country makes a loan at a low interest rate to a subsidiary in Luxembourg. The interest rate reflects the credit rating of the company group, for example 1%. The subsidiary in Luxembourg is typically set up with the purpose of loaning money at high interest rates, for example 9%, back to another subsidiary outside Luxembourg. Since the tax regime in Luxembourg is tailored to be advantageous for the financial arm of multinational companies, the profits generated there are taxed at very low rates. Such mechanisms are effective means to erode tax bases in countries with high tax rates and to shift profits to countries where they are less taxed (see also Base erosion and profit shifting).[19][20]

In December 2016, Luxembourg government shows good will and changes its tax rules for companies, making it more difficult for multinationals to avoid paying taxes through international structure.[73] However, in January 2017, The Guardian publishes revelations showing that Luxembourg continues obstructing tax reforms efforts in Brussels, as was the case when Jean-Claude Juncker was the Grand-Duchy Prime Minister.[74]

The tax schemes that enable multinationals to achieve aggressive tax optimisation are complex. They are often set up by specialised companies such as tax law firms or large international accounting and financial audit firms such as PwC, EY, Deloitte and KPMG (the so-called "Big Four"). The LuxLeaks scandal has highlighted the role of these tax intermediaries.

According to the International Consortium of Investigative Journalists (ICIJ), files used for the LuxLeaks revelations come from employees or former employees of Luxembourgish subsidiaries of the international accounting firms: PwC, EY, Deloitte and KPMG (the "Big Four").

Between December 2014 and April 2015, three people were indicted in Luxembourg in connection with LuxLeaks revelations. No multinational corporation faces charges in any country or at the international level, due to the so far legality of tax rulings.


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