Why is luxembourg a tax haven

Media in more than 30 countries are currently sifting through a mountain of data. The banks of Cyprus could soon face bankruptcy, dragging the rest of the country with them.

But how did it come to this, and what means of rescue could the Cyprus government still reach for? Visit the new DW website Take a look at the beta version of dw. Go to the new dw. More info OK. Wrong language? Change it here DW. COM has chosen English as your language setting. COM in 30 languages. Deutsche Welle. Audiotrainer Deutschtrainer Die Bienenretter. Europe Luxembourg: the EU's top tax haven Switzerland is a well-known hideaway for assets from around the world, but the country does not belong to the European Union.

Deutsche Bank is one of banks in the tiny country. Luc Frieden - finance minister in tax paradise? Guntram Wolff supports policies of tax transparency.

Tax havens can be found well beyond the Caribbean. Politicians dig out plans to target tax havens German banks have helped customers funnel money into tax havens for decades. Expert insights, analysis and smart data help you cut through the noise to spot trends, risks and opportunities. Sign in. Accessibility help Skip to navigation Skip to content Skip to footer. Join over , Finance professionals who already subscribe to the FT. Choose your subscription.

Trial Try full digital access and see why over 1 million readers subscribe to the FT. Oxfam notes that in , five EU member states Cyprus, Ireland, Luxembourg, Malta and the Netherlands presented "economic indicators typical of tax havens e. The report adds that Luxembourg had levels of Foreign Direct Investments coming in and out of the country 67 to times bigger than its total GDP.

Putaturo argued that the situation inside Grand Duchy is not much different than what one can witness in the Cayman Islands, a British overseas territory in the Caribbean often considered the prototype of a tax haven.

The Cayman Islands have zero corporate tax rate, while Luxembourg uses other kinds of instruments," she said. It's a more complex system that is also easier to hide. Luxembourg is placed three positions below, in sixth spot. Neither country is included in the EU's blacklist. In fact, the Cayman Islands was removed from the list in October , prompting a backlash from civil society groups.

European legislators agree with advocates that the weakness and flaws of the EU's tax haven blacklist require urgent change. It is difficult to imagine that the prime minister of such a small state was unaware such deals were taking place. There is a difference between the court of law and the court of public opinion. But we know from recent cases that the EU Commission has tended to follow the court of public opinion with criminal investigations of its own, as was the case of Amazon.

It is likely that the Commission will now investigate these leaks and may impose fines on Luxembourg. I doubt Juncker can ride this one out. Edition: Available editions United Kingdom.