Luxembourg Tax Scandal Ropes In Some Music-Related Companies

Michel Porro/WireImage

Exterior of the Palace of the Grand Dukes is reflected in a shop window also showing the Dutch national flag as Luxembourg prepares for the visit of King Willem-Alexander and Queen Maxima of The Netherlands on May 23, 2013 in Luxembourg.

Luxembourg's tax policies have been brought under the microscope after a coalition of journalists under the auspice of the International Coalition of Investigative Journalists revealed agreements that the government of the country made with over 300 companies. The deals, allegedly assisted by PricewaterhouseCoopers, allowed some companies to achieve effective tax rates of one percent or lower on profits brought into the country with a population of 543,000.

Several music-related companies are listed in the leaked documents, including Amazon, Apple, Atomico (an investor in Jambox producer Jawbone), Citigroup (which sponsors live music events), Pepsi (known for its marketing campaigns with global superstars), and Vodafone (a partner with Deezer in Brazil and Spotify in Ireland).

As well, ICIJ notes that "some 80 percent of royalties on earnings from intellectual property -- software copyrights, patents and trademarks, for instance -- are exempt from taxes."

PriceWaterhouseCoopers stressed that it was in accordance with all relevant laws, and representatives of Luxembourg denied any wrongdoing, with its Ministry of Finance saying in a statement that the deals are in accordance with European law.


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