Luxembourg Prime Minister Xavier Bettel said it will be a “challenge” for his nation to shake its image as a tax haven.
The country avoided being named on a list 17 “non-cooperative tax jurisdictions” issued by the European Commission on December 5. Among the countries named were Barbados, Grenada and Guam.
“It will be a long time before Luxembourg finally loses its reputation as a tax haven, but the real challenge for Luxembourg was and will be on our shoulders,” Bettel told Deutsche Presse-Agentur.
In a report released in November, British charity Oxfam said it applied the European Union’s own criteria for a tax haven. It said four EU members should be included: Luxembourg, Ireland, the Netherlands and Malta.
“The [EU] blacklist is being drafted in secret, which makes public scrutiny impossible,” Oxfam said in a statement before the list was announced.
The Luxembourg government disagreed.
“The methodology underlying this study is flawed,” Bob Kieffer, chief adviser to the Luxembourg government at the finance ministry, said in an emailed response.
The report “takes no account of the economic realities deriving from the existence of the single market of the European Union,” he said.
“By doing so, the study seems to assume that a financial centre should only serve a national market and ignores Luxembourg’s role as a European hub for many cross-border activities,” he said.