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29 Stan. J.L. Bus. & Fin. 1 (2024)

handle is hein.journals/stabf29 and id is 1 raw text is: The Untold Tale of a Tax Rulings Haven LEANDRA LEDERMAN* Abstract. When the International Consortium of Investigative Journalists (ICIJ) broke the LuxLeaks scandal, it revealed hundreds of billions of dollars in secret deals granted by the small country of Luxembourg to large multinational companies such as Apple, Disney, and Pepsi. These sweetheart deals, in the form of Luxembourg tax rulings, allowed many name-brand companies to dodge huge amounts of tax that would otherwise be due to the United States or other countries. Surprisingly, a tiny tax agency had produced thousands of tax rulings in the course of a few years. This Article makes three major contributions. First, it explores where Luxembourg's informal tax-rulings process came from and how it became so prolific. It draws on government documents and news stories to tell the story of the importation and dramatic growth of Luxembourg's rulings process, with players that include Dutch tax advisers, a man nicknamed Monsieur Ruling, and Big Four accounting firms. Second, it makes the original argument that three factors were critical in attracting so many large companies to seek Luxembourg tax deals: (1) amenability of the tax administration, (2) trust in the Luxembourg government, and (3) secrecy. The Article shows that once these factors changed, Luxembourg's rulings volume plummeted. The three factors of amenability, trust, and secrecy also reappear in the recent LuxLetters scandal, involving an alleged new procedure for under-the-radar rulings. Third, the Article examines the aftermath of LuxLeaks. It examines the timing of the codification of Luxembourg's new rulings process in relation to the ICIJ investigation. And it teases apart legal changes that may have contributed to the precipitous drop in Luxembourg tax rulings. It also explores whether the funds previously flowing into Luxembourg arrangements simply moved elsewhere in the world. * William W. Oliver Chair Emerita in Tax Law, Indiana University Maurer School of Law. This project was supported in part by a research grant provided by the Fulbright Belgium/Luxembourg Commission. The author is grateful to Werner Haslehner for hosting her at the University of Luxembourg and for many helpful discussions. She thanks him, Emily Cauble, Victor Fleischer, David Gamage, Tracy Kaye, Jay Krishnan, Gijsbert Loos, Omri Marian, Ruth Mason, Rachel Myers, Shu-Yi Oei, Katerina Pantazatou, Julia Sinnig, Deborah Widiss, Lily Zechner, and Larry Zelenak for comments on prior drafts. The author is also grateful for helpful discussions with Nickolas Cole, Tina Ehrke-Rabel, Stefanie Geringer, Hans Gribnau, Sarah Lawsky, Martijn Nouwen, Emily Satterthwaite, Jan Vleggeert, and participants in workshops at the Duke, Irvine, and Maurer Law Schools. She also appreciates the assistance of Rebecca Bertoloni Meli and John Bunck, as well as the valuable research assistance of Meschac Felisma and Zhong Zhuang. 1

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