The EFG Group, in which the powerful Latsis family is involved, and Weather Investments, which operates in Greece as Wind Hellas, are among a number of companies associated with Greece are among thousands of international corporations that have multi-million euro agreements with the Luxembourg authorities that help them reduce their tax bills.
Copies of the agreements are among almost 28,000 pages of leaked correspondence between PricewaterhouseCoopers in Luxembourg and the tax authorities there which have been shared by the Washington DC-based International Consortium of Investigative Journalists (ICIJ) with more than 40 media groups around the world.
The documents show that nine companies with Greek links have had secret tax deals approved by the Luxembourg authorities. Of the nine Greece-associated companies, five have been named. Others include Babock & Brown, Macquarie Group and Olayan Investments Company Establishment. The four remaining companies will be named between November 7 and 30 on the ICIJ website.
Eurobank was part of the EFG Group when the deals were signed in 2009 and 2010. Spiro Latsis, whose net worth of some $3.2bn earned him 506th place in the last Forbes billionaires list, is chairman of EFG International, which is 55% owned by EFG Group. In 2012, when it owned 44.7% of Eurobank, the EFG group announced it was transferring 43.55% to nine younger members of the Latsis family and would retain 1.15%..
While these private deals are legal in Luxembourg, the Guardian described the tax deals as painting “a damning picture of an EU state which is quietly rubber-stamping tax avoidance on an industrial scale”.
Luxembourg’s huge tax avoidance industry was developed during the years when the new president of the European Commission, Jean-Claude Juncker, was the finance minister and then the prime minister of the tiny EU member-state.
Some 340 other international companies like Pepsi, Ikea and FedEx have secured the secret tax deals from Luxembourg, allowing many of them to slash their global tax bills while maintaining little presence in the tiny central European duchy, the documents show.
The confidential PwC documents are so-called “advanced tax agreements” (ATAs) that allow companies loan hundreds of millions of euro to fellow group companies in Luxembourg, before the money is loaned back again to group companies elsewhere. These Luxembourg companies usually have no employees.
The ICIJ has chosen to work with Greek daily Ta Nea in publishing the documents. Unlike other media organisations taking part, such as the Guardian or the Irish Times, Ta Nea’s homepage did not name any of the Greek-related companies involved on Tuesday night, when the story broke. Neither did it make the leaks the main story in its Wednesday edition.
How the secret deals work: