Luxembourg news: Foreign minister asks for “solidarity” from Germany; PM says “tax-friendly” environment to continue

There are days when it’s not so easy to find relevant articles in secrecy jurisdiction media.

On those days, I turn to Luxembourg.

Less than a week after Luxembourg, together with Austria, blocked EU attempts to increase transparency in tax reporting, Luxembourg Foreign Minister Jean Asselborn has given an interview in which he asks Germany to show more “solidarity for the needs of others”.

“In an interview with German newspaper “Stuttgarter Nachrichten” the Foreign Minister reportedly said that the European Union should not be identified with “social coldness or the cutback of social services and the reduction of jobs.””

Tageblatt.lu also covers Asselborn’s remarks. Based on the first reader comments below the article, it seems that he is trying to shift the focus towards Greece, Spain, France, Portugal and Cyprus – “solidarity” in this context is some sort of code for “let’s talk about those debt-ridden over-spenders” – and away from Luxembourg’s role in enabling tax abuses within the EU.

During a presentation of his government’s programme last week, despite mentions of diversifying the Luxembourg economy into new activities such as ICT and biotechnology, Prime Minister Bettel said that a “tax-friendly environment will be maintained for UCITS, SICARs and SIFs and there will be no wealth or inheritance tax”. Or as wort.lu put it: “the new government will not bite off the hand that feeds it.”

UCITs, SICARS and SIFs are investment vehicles: The SICAR, for example, is promoted by EY as “Luxembourg’s tailormade structure for the Private Equity Fund Industry” with “tax neutrality designed to suit different investors’ needs”.

And in other news, wort.lu covers the jailing of the former head of Kaupthing bank for fraud:

“Three former directors of the collapsed Icelandic bank Kaupthing and its Luxembourg subsidiary were convicted for fraud by a Reykjavik court Thursday and sentenced to between three a half and five and half years in prison.”

“The three men were convicted for hiding the fact that a Qatari investor used money loaned from Kaupthing to buy a 5.1 percent stake in the bank right in the middle of the 2008 financial crisis.”

“…the former head of its Luxembourg subsidiary, Magnus Gumundsson – who played a key role in granting the loan – was given a three-and-a-half-year sentence.”

The BBC’s coverage notes that shell companies in the British Virgin Islands and Cyprus were used to carry out the Kaupthing fraud. (hat tip: Tax Justice Network blog).

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