Walt Disney Co., commodities group Koch Industries and others agreed deals in Luxembourg that could have delivered huge tax savings, a group of investigative journalists has reported, heightening an international debate on corporate tax avoidance. The International Consortium of Investigative Journalists (ICIJ) said the two companies engaged in complex restructurings and channelled hundreds of millions of dollars in profits between 2009 and 2013 through Luxembourg subsidiaries that enjoyed tax rates of less than one per cent.

The disclosures released on Tuesday follow earlier releases from the ICIJ, described on its website as a global network of journalists who collaborate on investigative stories, which prompted an EU parliament no-confidence vote on the European Commission’s new president Jean-Claude Juncker.

Juncker, who had overseen the Grand Duchy’s tax policies for two decades as finance minister and later prime minister, survived the vote.

Luxembourg’s finance ministry said yesterday its system for issuing advance rulings to companies, outlining how the tax authority would treat their transactions, was “compliant with international and national law”.

It added: “The way in which these documents were acquired is highly questionable”.

Koch spokesman Robert Tappan said in an e-mail: “Koch companies conduct their business lawfully and they pay taxes in accordance with applicable laws.”

Disney established an inter-company bank in Luxembourg which then extended high-interest loans to operating affiliates in countries such as France, thus reducing their taxable income, the ICIJ said.

Disney spokeswoman Zenia Mucha said the report was deliberately misleading. “Disney’s global tax rate has averaged 34 per cent over the last five years ... The ruling has not meaningfully affected the taxes we pay in any jurisdiction globally.”

Advisory group EY advised Disney and Koch on their arrangements, the ICIJ said. Other companies whose tax deals appear in the latest leaks include Hong Kong-based Hutchison Whampoa Ltd, private equity group Warburg Pincus and Microsoft Corp subsidiary Skype.

Microsoft said it followed the law in all the countries where it operated. Warbug Pincus declined comment.

The ICIJ’s first set of Luxembourg revelations, published on November 5, were based on files from accounting group PricewaterhouseCoopers (PwC).

In addition to EY, the latest set of documents include files from the other two of the ‘Big 4’ accounting firms, Deloitte and KPMG.

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