While PwC and prosecutors argue that the so-called LuxLeaks documents were private property and revealing them was a criminal offense, the trial is seen by critics as an attack on press freedom and efforts by whistle-blowers to shine a light on the murky world of tax dodging. The revelations sparked a global outcry and led to calls for a crackdown on tax avoidance.
“Shutting off whistle-blowers, without whom we would not even be talking about cracking down on tax avoidance, would be immensely harmful to the public campaign for tax justice,” said Fabio de Masi, a left-wing German member of the European Parliament who’s part of a group backing Deltour. “If they are found guilty, and potentially even sentenced to prison, this could have enormous effects in Luxembourg and beyond,” he said.
Global attention has now switched to the mass leak of documents known as the Panama Papers, but Luxembourg is still picking up the pieces after LuxLeaks hit the country like a “tsunami” in 2014. The same group of investigative journalists who revealed the Panama Papers, also published the LuxLeaks data with thousands of pages of data showing sweetheart tax deals for companies including Walt Disney Co., Microsoft Corp.’s Skype and PepsiCo Inc.
The ripple effects sped beyond Luxembourg, causing European Union regulators to expand a tax subsidy probe and propose new laws to fight corporate tax dodging, while EU lawmakers created a special committee to probe fiscal deals across the 28-nation bloc.