http://www.economist.com/node/21623755/comments#comments
Luxembourg has become
an increasing popular financial center because its leniency on taxation for
individuals and businesses alike. Its recent growth has put it into the top ten
in global financial centers. After the recession, the Luxembourg private banks
rebounded well and boosted their reputation as a tax haven. Luxembourg’s
clients are tax compliant and seeking expertise in financial planning. The
clients seek out Luxembourg because the numerous EU tax laws. However, a
movement for a new system of tax exchange may harm Luxembourg.
Luxembourg is also
the focus of an international push by the OECD to discontinue tax breaks for
multinational businesses. A push model assumes economies of scale and
oligopolistic market structure. It stresses a firm's decision to industrialize may
be contingent upon the expectations of other businesses. It also emphasizes that
underdeveloped countries, such as Luxembourg, need large amounts of investments
to start developing economically. Luxembourg has also become a center for the
distribution of investment funds. Currently, it manages over 4,000 funds worth
$3.7 trillion, which count as investments toward the EU.
Companies
such as Amazon and Fiat, which use financial services in Luxembourg, are under
investigation because they are suspected to have received prohibited state aid.
As a result, Luxembourg may lose of its business due to ease on taxes. However,
some companies are whiling to take the risk to stay in the country. Chinese and
German banks have also begun sending customers to Luxembourg because it has
become a center for lending and trading of foreign currencies. Luxembourg is
also the third largest center for Islamic funds.
No comments:
Post a Comment