If Luxembourg is compared to with Indian Railways, it would be just one railway station out of the more than seven thousand five hundred of Railway Stations it has. Luxembourg has population of less than 7 lakh, which is the daily traffic on some of the stations of the Indian Railway. But Luxembourg is the second richest country in the word with per capita income of about 80 thousand USD on PPP basis. In terms of territory it is twice the size of tiny state of Goa in India. But despite it’s size, Luxembourg is one of the four Capitals of European Union and is seat of Justice in EU.
So what is so important that in this pandemic, both countries could not postpone the summit and decided to be across the table through the virtual video conference.
Luxembourg on FATF Grey List:
Concerns have been expressed about Luxembourg’s banking secrecy laws. It had and still has a reputation as a tax haven. This led to its being added to a “grey list” of nations with questionable banking arrangements by the G20 in 2009. In response, the country soon after adopted OECD standards on exchange of information and was subsequently added into the category of “jurisdictions that have substantially implemented the internationally agreed tax standard”.
In March 2010, the Sunday Telegraph reported that most of Kim Jong-Il’s $4 billion in secret accounts is in Luxembourg banks. Amazon.co.uk also benefits from Luxembourg tax loopholes by channeling substantial UK revenues as reported by The Guardian in April 2012. Luxembourg ranked third on the Tax Justice Network’s 2011 Financial Secrecy Index of the world’s major tax havens, scoring only slightly behind the Cayman Islands.
Luxembourg was ranked as the 2nd safest tax haven in the world, behind Switzerland.
The leaked papers show Luxembourg acting as a go-between, both enabling and masking tax avoidance, which always takes place beyond its borders. The documents are mainly Advance Tax Agreements – known as comfort letters. The leaked papers include 548 of these private tax rulings. These ATAs are typically schemes put to the Luxembourg tax authorities which, if implemented, reduce tax bills substantially.
The documents reveal a number of financial structures which were approved by the Luxembourg tax authorities, and which led to substantial tax savings for the companies involved. One of the more common is based on cross-border lending within a group of companies, and a mismatch between the perceptions of Luxembourg and overseas tax authorities. (More details can be found here in a long article published by The Guardian)
It is not surprising that media of India is simply not interested in any facts or news. They are busy in propaganda war and failed to report this virtual summit which is very important in the main plank of Prime Minister’s proclaimed war against black money.