Chapter 3950 Steel and Finance

After the plane flew smoothly, Masashi Hayakawa began to contact the staff at the Tokyo headquarters with a computer to confirm that the work he had assigned had been notified.

Yuichi Kashima contacted Darcy who was contacting Chimatsu and passed the news that the three of them had already set off to Darcy, and asked Darcy to confirm the hotel arrangements after Chiba got off the plane and the subsequent itinerary.

The two of them were busy with their own tasks, and Chi Feichi was not idle either. They used the computer to check the information sent to him by Chi Shinosuke.

The Luxembourg they went to this time, its full name is "The Grand Duchy of Luxembourg". It is located in the center of Germany, France and Belgium. It is a miniature landlocked country with a land area of ​​only 3 square kilometers.

During the war, Luxembourg, a small country sandwiched between Germany and France, was naturally not easy to live, and was beaten on both ends. In history, Luxembourg was occupied by France and also by Germany. It was not until the end of World War II that Germany was defeated and Luxembourg resumed its independence.

The natural resources in Luxembourg are not abundant, and forests account for one-third of the country's territory and are not suitable for cultivation. Fortunately, there are abundant iron ore underground in Luxembourg. By the 1820s, Luxembourg began to vigorously develop iron and steel smelting industry, constantly improving steel smelting technology, and once became the world's forefront of steel producers.

Afterwards, the United States, Japan and China's industries rose, and Luxembourg's steel exports to the outside world decreased year by year. The domestic steel smelting industry encountered a crisis. In order to preserve this national pillar industry, Luxembourg made a shocking reform - through mergers and acquisitions, the national steel companies were merged into one company, and at the same time gave up large-scale production and turned to the production of special steel with high technological content.

In 2001, the only steel company in Luxembourg merged with two other European steel groups to form the world's second largest steel group and its headquarters was in Luxembourg. In 2006, the merged steel group once again merged with the world's largest steel company at that time to form the world's largest steel group, and has been firmly ranked first for many years.

The cooperation between Zhenchi Group and Luxembourg Iron and Steel Company can be traced back to the end of the 19th century, when the steel companies in Luxembourg had not yet merged. Zhenchi Group only cooperated with two of them. After the merger and acquisition, Zhenchi Group's steel orders naturally transferred to the last remaining company, and the cooperation between the two parties has continued to this day.

But Luxembourg is most famous in recent years not the steel industry, but the financial industry... and tax scandals.

In fact, the average tax rate in Luxembourg is not low, about 25%, higher than that of Britain, France, Italy and other countries. However, Luxembourg's tax policy has some subtle designs. Multinational corporations can transfer operating profits from other countries to Luxembourg, and Luxembourg stipulates that "business activities that are not in Luxembourg are tax-free". In this way, multinational corporations only need to pay some other low taxes in Luxembourg to avoid paying large operating taxes in other countries.

Such a policy can allow multinational companies to save a lot of money on tax expenditures every year. How much they can save depends on which multinational company can transfer and how much profit they want to transfer to Luxembourg.

If the multinational company is not satisfied with the tax, it can also negotiate with the Luxembourg government and ask Luxembourg to formulate a separate tax strategy, such as how much money is transferred each year, you can get a certain tax reduction policy, etc., which can be said to be quite flexible.

Moreover, Luxembourg will not disclose tax information about a company to the public. In other words, as long as both parties keep it confidential, outsiders will not know how much tax the company paid.

With such tax policies, Luxembourg has attracted a large number of multinational companies to settle in.

Well-known multinational groups in the United States, Japan, Britain, France, Germany and Italy have almost all set up European headquarters or important branches in Luxembourg. Some companies do not even set up actual office locations, but only register their company in Luxembourg and set up their company's bank accounts, and then they start to transfer their operating profits.

In addition, like Swiss banks, banks in Luxembourg will keep customer information highly confidential. There is no need for any procedures to open a bank account, no registration name or address is required. You only need to apply for a voucher for deposit and withdrawal to complete the account opening and deposit and withdrawal.

This has attracted many arms dealers or traders in the black and gray industry. Even if they deposit money in banks in Luxembourg without interest, they still have to pay the storage fee regularly, and these people are happy to pay the storage fee.

Under such circumstances, financial institutions and banks in countries around the world are naturally happy to develop their business to Luxembourg.

After all, when opening a bank in Luxembourg, banks not only do not have to pay interest to depositors, but also charge storage fees. If depositors operate black and gray industries, they may one day be killed and leave a fund for the bank that they will not withdraw for decades. The bank can use this money to invest outside. Which bank can resist this temptation?

This also led to more than 200 banks located in Luxembourg, and even the Field Group established financial institutions in Luxembourg in its early years.

The roots of banks and financial institutions have allowed major multinational corporations to be at ease and conveniently transfer operating profits, which has led to a virtuous cycle.

In this way, Luxembourg's financial industry began to develop rapidly, and a large amount of funds poured in and out every day. Even if only some relatively low taxes were collected, Luxembourg quickly became the country with the highest per capita GDP in the world, surpassing the United States and other European countries in this regard.

Subsequently, the European Audit Office, the European Court of Justice, the European Parliament General Secretariat, the European Investment Bank, the European Financial Foundation and other institutions also set up headquarters in Luxembourg, which is known as the third European financial center after London and Frankfurt.

However, under Luxembourg's tax policy, multinational corporations save tax expenses every year, and Luxembourg receives taxes and fees paid by major multinational corporations every year. This behavior actually infringes on the interests of other countries. Considering that taxes from various countries are used for people's livelihood construction, it is also equivalent to harming the interests of ordinary people.

In 2012, an organization called the International Alliance of Investigative Journalists released a report, revealing that hundreds of multinational corporations signed secret tax agreements with Luxembourg, transferring hundreds of billions of dollars in profits to Luxembourg every year, and saving hundreds of millions of dollars in taxes each year.

After this incident was exposed, it immediately caused an uproar in various countries.

Before major multinational corporations transfer profits to Luxembourg, they will naturally ask the legal department, tax department and other departments to jointly formulate reliable and effective strategies. Some companies even hire professional companies to formulate tax strategies, which also leads to the actions of major multinational corporations being within the legal red line and not being considered a violation of the law.

However, this kind of behavior of harming the interests of other countries and filling Luxembourg and capitalists with private pockets is always immoral. Although capitalists do not care about moral things, the matter has been exposed and everyone cannot pretend that nothing has happened.

In the same year, the EU conducted an investigation into Luxembourg's tax issues.

By 2014, the EU implemented a comprehensive tax reform, requiring EU countries to disclose tax information, which was naturally targeting Luxembourg, the sixth who secretly made money from other countries. Luxembourg also announced that it would impose a 17% VAT tax in the future, increasing the tax revenue of multinational companies in the country.

Of course, Luxembourg still has the right to give tax preferential treatment to industry operators for industries that Luxembourg believes are "helpful to national development".

At present, Luxembourg only implements the EU minimum tax standards for small and medium-sized multinational corporations. For large multinational corporations like Umbrella, Luxembourg will still give a lot of tax preferential treatment for various reasons and tailor a tax agreement for these large multinational corporations.

However, due to the new EU regulations of "disclosed tax information", Luxembourg dared not join forces with capitalists to make too much money, so as not to be bombarded by other countries.

In general, Umbrella has a deep relationship with Luxembourg.

Since decades ago, Zhenchi Group has traded with Luxembourg's pillar industry companies. Field Group has also established banks and other financial institutions in Luxembourg early. Although the two groups were not considered "special customers" in Luxembourg at that time, they have worked together for many years, and the two groups are also considered "high-quality and honest customers" on the Luxembourg list. Luxembourg has provided some tax preferential treatment to both groups. After Umbrella was officially established, Luxembourg even mentioned Umbrella to the "special customers" list and is negotiating a new tax agreement with Umbrella.
Chapter completed!