It should be no great surprise to realise the reason many of the Espírito Santo companies were based in Luxemburg; tax.
The disgraced Espírito Santo empire, now in its final stages of decomposition, joined companies from around the world in making secret deals in Luxemburg which has saved them millions in tax.
Between 2002 and 2010 confidential tax agreements between Luxembourg and more than 300 multinationals have enabled the companies to avoid the payment of billions of euros in taxes in the countries where their profits were generated, including in Portugal.
The detailed analysis from the International Consortium of Journalists will make sobering reading for the President of the European Commission Jean-Claude Juncker who of course led the Luxemburg government for nearly two decades. How he responds to these well reported claims will deterime his standing in the EC and his future as its leader.
Some 80 journalists from 26 countries have been involved in the research leading to todays authoratitive report and has access to more than 28,000 pages of documents relating to these highly secret tax arrangements.
The ‘LuxLeaks’ revelations have been published in the media across Europe and in the major financial centres worldwide.
Among the tax agreements referenced are those between Luxemburg and Pepsi, Apple, Ikea, FedEx, Heinz and Amazon and account for billions of euros in lost taxation in the countries where these companies make their profits.
Many of Portugal’s largest companies are registered in Holland and elsewhere using the excuse that they have better access to funding if they are based outside the country as borrowing money is made difficult in Portugal as banks shore up their balance sheets by restricting lending.
"These documents show how the giant web, telecom, finance and consumer goods companies rely on the bendy fiscal rules in Luxemburg and on the failure of international regulations to spot the transfer of profits, thus preventing companies from being taxed, or being taxed very lightly," according to Le Monde today.
The Espirito Santo clan’s use of Luxemburg was well know and long standing, yet such was the power of Ricardo Salgado (pictured on his arrest) before impotence struck that his financial dexterity used in paying as little tax as possible to the Portuguese treasury apparently went un-noticed for decades as the tax noose tightened on Portugal’s honest taxpaying citizens.
