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The structure has raised suspicions that the German carmaker is trying to sidestep the tax office back home.
When Hans Dieter Pötsch was asked in early 2013 about the tax-shelter schemes used by some multinational corporations, his words seemed to reflect genuine indignation.
"It's rather cute to recognize a company with five employees as being sufficient to establish a tax home." VW finds the situation to be completely normal.
At the time, he was chief financial officer and thus responsible for his company's tax strategy.His Green Party is one of the parties currently in coalition talks with Merkel's conservatives.So, too, are the business-friendly Free Democrats (FDP), which included a demand in their campaign platform for an EU regulation against tax avoidance strategies that involve shifting profits across international borders.This Luxembourg-based company empire is managed by just five fulltime staffers."VW and the German government must answer the question as to why such a Luxembourg holding company is accepted by our tax laws," says Green Party financial expert Giegold.
In Germany, the issue is likely to crop up in ongoing coalition negotiations, as Chancellor Angela Merkel seeks to assemble a new government following September 24 parliamentary elections.