Explore the Documents: Luxemborg Leaks Database: Under ‘Retail’ we find Proctor Gamble International (Thrive Movement?) tax migration from Bermuda to Luxemborg? $50 Billion? And others…

ICIJ’s Luxembourg Leaks investigation is based on a confidential cache of secret tax agreements approved by Luxembourg authorities that provide tax-relief for more than 350 companies around the world. These private deals are legal in Luxembourg.

In this interactive application ICIJ has created a visual and searchable database of 548 tax rulings that have been approved by Luxembourg officials with a stamped and signed confirmation letter. In addition, ICIJ is publishing 16 other documents — such as corporate tax returns — related to companies in Luxembourg.

On December 9, 2014, ICIJ released on this database a small new batch of Luxembourg tax rulings. ICIJ received the documents after the publication of the first installment of stories on Nov. 5.

The new documents are Luxembourg tax rulings sought by a variety of accountancy firms on behalf of corporate clients from around the world. The files cover the period from 2003 to 2011. ICIJ is only publishing the rulings that were reported on by ICIJ and its media partners and that bear evidence that they were approved by Luxembourg authorities.

Source: http://www.icij.org/project/luxembourg-leaks/explore-documents-luxembourg-leaks-database


Is Your Head Spinning? 5 Tips to Understand the ‘Lux Leaks’ Files

Source: http://www.icij.org/project/luxembourg-leaks/your-head-spinning-5-tips-understand-lux-leaks-files

Want to see how global companies can avoid billions in taxes by routing their profits through Luxembourg? All the information is there in the leaked documents, but understanding the complex structures companies set up is not an easy task. Here are a few tips on how to read the documents and knowing what to look for.

  1. Start with the pictures (graphs and charts)

In every ruling there’s a simplified structure chart of the company and the relevant entities they use to lower their tax bill. In most cases there are actually two charts: the current structure and the one the company wishes to set up. These don’t include every subsidiary in every country. But that’s why they’re so helpful: they will usually only show the subsidiaries that are relevant for the Luxembourg tax authorities. So now you know where to look when tracking what the company is doing to avoid taxes.

There’s a catch though: in a lot of these documents the advisors of PricewaterhouseCoopers use code names for subsidiaries, especially those outside of Luxembourg. For example, if a Dutch company is part of the structure, the standard code name would be DutchCo. Even though you wouldn’t have the name of the company, you know there’s a trail going from Luxembourg to The Netherlands.

Don’t worry yet if the structure chart doesn’t seem to make any sense, or just blows you away with its complexity, because now it’s time for step two…

  1. Back to the start

When you have a basic idea of the structure, go back to the first page of the document. This is where the tax advisors introduce the company and explain step by step the structure they want to set up. When laying out a certain step – for example, the company wants to give out loans from Luxembourg to subsidiaries around the world – the advisors will then explain how they think the tax authorities should view this. It’s not an easy read, but in their own way they will explain why it makes sense to set up the structure as proposed.

One of the main benefits of the Luxembourg tax system is the treatment of interest. Companies registered in Luxembourg are exempt from tax on interest income. So it makes sense for multinationals to structure their operations in such a way that profits from other countries can flow into Luxembourg as interest.

Look for signs that foreign profits get transformed into interest when going into Luxembourg. A clever way to do this is by so called hybrid loans. These have all the characteristics of equity – and are treated as such in most countries – but Luxembourg approves these as debt for tax purposes. A lot of companies use profit participating loans, where a variable interest rate on the ‘loan’ is set to be as high as annual profits of the subsidiary.

  1. Royalties

Another perk of the Luxembourg tax system is an 80 % tax exemption on all income from intellectual property. Look for brand names, patents, and production and distribution rights in the documents. Foreign subsidiaries will have to pay for the use of these, and the advisors from PwC explain in the document why it makes sense to charge for it.

  1. Take a step back

Is your head spinning already? Remember that these documents were written by highly specialized tax advisors who know all the ins and outs of different national and international tax laws. It’s impossible to understand everything in them, unless you team up with an expert in international tax.

When things stop making sense – take a step back and think about the company proposing these structures. What are they making and selling? Is it logical for them to be in Luxembourg or to have money routed there? The details of tax planning are very difficult, but the general idea is simple: move your money away from places with high tariffs into places with lower tariffs or a much smaller tax base.

One final tip: for just a few euros you can access the annual accounts of Luxembourg companies via the corporate registry. These documents are useful to see how the planned investments have turned out for the company and what the effective tax rate is.

Jan Kleinnijenhuis is a journalist with Dutch newspaper Trouw. You can read more of his stories from the Luxembourg Leaks project at Trouw.nl.


Procter & Gamble – 2010 tax ruling (March)

Source: http://www.icij.org/project/luxembourg-leaks/explore-documents-luxembourg-leaks-database


Tax ruling date: 9 March 2010

Accounting firm: Pricewaterhouse Coopers

Associated countries: Belgium, Bermuda, Italy, Switzerland, United States

Intended investment:$50 billion

Industries: Manufacturing, Retail

Luxembourg subsidiaries involved in the tax ruling:

Procter & Gamble Financial Services S.A.

Procter & Gamble International S.à.r.l.

Procter & Gamble Luxembourg Global S.à.r.l.


Procter & Gamble – 2010 tax ruling (January)

Tax ruling date: 27 January 2010

Accounting firm: PricewaterhouseCoopers

Associated countries: Belgium, Italy, Switzerland, United States

Intended investment:$3.91 billion

Industries: Manufacturing, Retail


Procter & Gamble – 2009 tax ruling (May 12)

Tax ruling date:12 May 2009

Accounting firm: Pricewaterhouse Coopers

Associated countries: Belgium, Canada, Ireland, Switzerland, United States

Intended investment:$18 billion

Industries: Manufacturing, Retail


There are a couple more…

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