More than 300 global corporations and financial institutions—including well-known names like Pepsi Co., FedEx, JP Morgan Chase, and Amazon—have created complex tax avoidance schemes using the small European nation of Luxembourg to funnel billions of dollars of profits away from the countries where they actually do business, according to leaked documents obtained and analyzed by the International Consortium of Investigative Journalists.

Luxembourg’s tax environment is like a “magical fairyland” for global corporations trying to avoid paying taxing.

As part of their reporting, ICIJ and its international media partners released a large cache of Luxembourg tax rulings—called comfort letters—which document the deals given to these transnational corporations in exchange for funneling their global profits through the country. The reporting details how the accounting giant PricewaterhouseCoopers (PwC) was at the center of the deal-making, representing the corporate clients before the Luxembourg Ministry of Finance which governs the nation’s tax system.

According to the ICIJ’s extensive reporting:

The leaked documents reveal that U.S.- and U.K.-based companies were the most heavily represented, but these same kind of deals were also used by companies throughout Europe.

Tax havens like this are creating “a global race to the bottom, depleting the contributions of major corporations and leaving citizens to pick up the tab.”  

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