Luxembourg tax deals for Disney, Koch brothers empires revealed
A new leak of confidential documents expands the list of big companies seeking secret tax deals in Luxembourg, exposing tax-saving maneuvers by American entertainment icon The Walt Disney Co., politically controversial Koch Industries Inc. and 33 other companies.
Related: Brand-name companies' secret Luxembourg tax deals revealed
Disney and Koch Industries, a U.S.-based energy and chemical conglomerate, both created tangles of interlocking corporations in Luxembourg that may have helped them slash the taxes they pay in the U.S. and Europe, according to the documents obtained by the International Consortium of Investigative Journalists.
Related: Follow Koch’s money
Widespread corporate use of tax maneuvers akin to these, in tax shelters the world over, are estimated to cost the U.S. treasury billions annually. They increase profits and benefit shareholders at the expense of the companies’ home countries and other places where they do significant business.
Related: How Luxembourg became Disney's tax-saving fairyland
ICIJ obtained the Disney and Koch tax documents as part of a trove of information that details big companies’ complex financial maneuvers through subsidiaries in Luxembourg. ICIJ received these documents last month, soon after publishing an earlier set of leaked documents detailing the Luxembourg tax deals negotiated by FedEx, Pepsi, IKEA and 340 other globe-spanning companies.
Related: Building a tax fairyland in Luxembourg in five not-so-easy steps
Other companies appearing in the newest leaked files include Hong Kong-based conglomerate Hutchison Whampoa, private equity firm Warburg Pincus, and Internet phone giant Skype. One of the Skype files relates to a restructuring in which Internet mega-marketer eBay sold a controlling stake in Skype to private investors. Skype, based in Luxembourg, is now a division of Microsoft.
Related: Five transactions and five tax exemptions for Koch in Luxembourg
“Microsoft adheres carefully to the laws and regulations of every country in which we operate,” the company said in an emailed statement.
The first set of Luxembourg tax deals, published by ICIJ and its media partners on Nov. 5, was arranged through the accounting giant PricewaterhouseCoopers. The latest set of documents reveal that the aggressive tax structures are being brokered not only by PwC but also by Luxembourg-based law and tax firms and the other “Big 4” accounting firms: Ernst & Young, Deloitte and KPMG.
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Copyright 2014 The Center for Public Integrity. This story was published by The Center for Public Integrity, a nonprofit, nonpartisan investigative news organization in Washington, D.C.
