Companies sign secret tax deals with Luxembourg: report

[November 06, 2014]  (Reuters) - More than 300 companies, including PepsiCo Inc <PEP.N>, AIG Inc <AIG.N> and Deutsche Bank AG <DBKGn.DE>, secured secret deals from Luxembourg to slash their tax bills, the International Consortium of Investigative Journalists (ICIJ) reported, quoting leaked documents.

The companies appear to have channeled hundreds of billions of dollars through Luxembourg and saved billions of dollars in taxes, the group of investigative journalists said, based on a review of nearly 28,000 pages of confidential documents.

The leaked documents reviewed by ICIJ journalists include hundreds of private tax rulings – known as comfort letters – that Luxembourg provides to corporations seeking favorable tax treatment.

Luxembourg officials denied any "sweetheart deals" in its tax system.

"The Luxembourg system of taxation is competitive – there is nothing unfair or unethical about it," ICIJ quoted Nicolas Mackel, chief executive of Luxembourg for Finance, as saying in an interview.

Pepsi, AIG and Deutsche Bank were not immediately available for comment.

EU state aid regulators are investigating Amazon's <AMZN.O> tax deals with Luxembourg, saying the arrangements could have underestimated the U.S. online retailer's profits and given it an unfair advantage, Reuters reported in October.

(Reporting By Neha Dimri in Bangalore; Editing by Rodney Joyce)

[© 2014 Thomson Reuters. All rights reserved.]

Copyright 2014 Reuters. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.