Walt Disney Group operates sophisticated tax planning through companies in Luxembourg. Revenues from Donald, Mickey Mouse and Uncle Scrooge in many countries are channeled to Luxembourg and comfortable low taxes there.
This shows a new leak of tax documents from Luxembourg. The leak has happened to the organization The International Consortium of Investigative Journalists (ICIJ) in Washington. The leak includes 35 companies.
The leak will be published in a variety of media in many countries Tuesday at 22 Norwegian time.
Loans to high interest rates
An important part of Disneys tax adjustments have been sending interest on intercompany loans to its internal bank in Luxembourg. It had in the four years up in September last year a total profit of more than 1 billion euros (9 billion).
According to publicly available financial statements of the bank was the tax on those profits only 2.8 million euro (25 million). This corresponds to a tax rate of just over 0.25 percent.
Tightens in Norway
The public Scheel selection let December 2 presented its report with proposals for changes to Norwegian tax rules.
The committee proposed to tighten the current rule that limits the deduction for net interest in the companies’ tax returns. The rule is intended to prevent Norwegian companies being drained of excess through unnatural high loan to foreign owners in countries with low tax.
Read about the committee’s proposal:
Sending money around the world
The latest leak from Luxembourg shows how the auditing and consulting firm Ernst & amp; Young (EY) made one cast of Disney Group with company organization and financing in 34 steps.
The leaked documents show how Uncle Scrooge owners send money in a circle around the globe. Round converter money from cash to debt to equity and back into cash.
The leaked documents Disney does not include pre-approval from the authorities in Luxembourg. But ICIJ has through public records in Luxembourg confirmed that adjustments described in the document was actually used.
accounting and consulting firm has faced ICIJ declined to answer detailed questions in relating to the agreement. In an email to ICIJ writes Ernst & amp; Young spokesman: “eys employees provide independent tax advice to its clients in accordance with national and international law.” For reasons of clients writes audit firm that they can not comment on individual cases.
Owner of Luxembourg
Central to the Disney approach raises two newly formed companies and Disney’s own internal bank in Luxembourg. The two companies have assumed ownership of 24 subsidiaries in Europe and the Cayman Islands.
Inter Bank gives loans to high interest to the subsidiaries so that surpluses in these being sent to low tax in Luxembourg in the form of interest to the internal bank.
The two companies and internal bank had a total profit totaling 2.8 billion euros (25 billion) in the four years until September 2013. But they had only one employee sharing, according to the leaked tax document.
Tax in the US
According ICIJs investigations it is unclear whether Disney has taken some of their profits from Luxembourg is home to the United States. Where will the money get a corporation 35 percent.
– Our global effective tax rate has averaged 34 percent over the last five years and 35 percent over the past year, said Disney spokeswoman in the US, Zenia Mucha, to ICIJ .
She also says:
– We organize our tax obligations in a responsible manner and aims to fully comply with all applicable tax rules. Their (ICIJs. Ed.’s Note.) Claims are not based on a precise understanding of our global tax position, she says.
Mucha did not answer a dozen questions from journalist forum ICIJ and has not clarified what Disney see as inaccuracies.
Leakage no. 2
This leakage is less than the previous Luxembourg leakage to ICIJ published in early November of more than 80 reporters around the world. The continued strong pressure on the newly elected EU president Jean-Claude Juncker.
He was Prime Minister of Luxembourg while auditing and consulting company PricewaterhouseCoopers (PwC) signed advance agreements on low taxes with the IRS in Luxembourg on behalf of their customers.
Aftenposten wrote about how two Swedish buyout funds in highly complex ways organized acquisitions in Norway through holding companies in Luxembourg. The Norwegian companies have had or have loans to holding companies in Luxembourg with interest of 12-13 percent. Such loans reduces profits in the high Norway.
On the document was not reason to argue that the Swedish companies have violated tax rules in Norway or Luxembourg. Swedish buyout funds said to Aftenposten that the loans were at market terms.
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