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Four Pioneers in Tax Transparency

Posted on December 21, 2015 by Stuart Gibson

Don't look now, but Europe is leading the world on transparency.

2015 was the year of intrepid whistleblowers, enterprising journalists, and determined policymakers. Europe was in the spotlight in the wake of the LuxLeaks and SwissLeaks scandals. Revelations of secret tax deals brought a sea change in how the world thought about tax transparency, with Europe acting decisively to let the sun shine in.

This week we profile four people who influenced tax policy in 2015, starting with the most unlikely of heroes, Antoine Deltour, the man who blew the whistle on Luxembourg.

While many in the global tax community have heard of Deltour, few know much about him beyond the fact that he used to work for PwC, allegedly leaked hundreds of previously secret tax rulings to the media, and is awaiting trial on criminal charges in Luxembourg. An idealistic young man who followed his conscience and revealed to the world secret tax deals cut by the Luxembourg tax administration, Deltour is a bit of an enigma. He did not aspire to be a whistleblower, shuns publicity, and did not even seek out the journalist who first reported the LuxLeaks story, Edouard Perrin. In fact, as Teri Sprackland reports in an eye-opening portrait of the man the European Parliament named its 2015 Citizen of the Year, Deltour is a modest person who, but for what he did, would be living in obscurity in a village in eastern France.

Edouard Perrin, the journalist who brought the rulings to light, sought out Deltour following a series of pieces that Perrin had done for French television. Perrin persuaded Deltour to let him tell the public what the Luxembourg government had done. And Perrin worked with the International Consortium of Investigative Journalists (ICIJ) and major newspapers in Europe to translate the secret rulings and publish them on the ICIJ website. J.P. Finet profiles this courageous journalist, who also awaits trial on criminal charges in Luxembourg.

The work of Deltour and Perrin contrasts sharply with the story of Hervé Falciani, the former HSBC employee who allegedly was responsible for the SwissLeaks scandal. Falciani, recently convicted in absentia in Switzerland, denies having disclosed information to the French government and others about hundreds of Swiss bank accounts. Yet his tales of intrigue, which include his alleged kidnapping by agents of Israel's Mossad, do not begin to describe his influence on tax administration. Following the French government's successful prosecution in 2015 of a number of high-profile citizens exposed in the scandal, France has seen an exponential rise in voluntary disclosures of offshore accounts. With the alleged sale of the list to Germany, expect history to repeat itself. William Hoke reports on the impact of Falciani's conduct, which still echoes around the world.

Of course, leaks do not change tax policy unless they expose underlying issues in the tax system. In Europe one such issue involves whether, by granting favorable tax rulings to certain MNEs, Luxembourg provided illegal state aid in violation of the EU's founding treaty. EU Commissioner of Competition Margrethe Vestager is spearheading the European Commission's investigation into this issue, focusing not just on Luxembourg, but also on the Netherlands and Ireland. The full impact of her work, profiled by Amanda Athanasiou, remains to be seen.

Exposure of secret Luxembourg tax rulings and Swiss banking has led to greater transparency. The EU will soon require member states to make automatic, spontaneous disclosures of all tax rulings, including APAs. Even Luxembourg is jumping on the transparency bandwagon. One must wonder whether the rush to transparency would ever have occurred had Deltour, Perrin, and Falciani not acted to expose these secrets to the world.


Stuart Gibson is editor of Tax Notes International.