Cameron set to embarrass Juncker by pushing tax avoidance at G20 summit

David Cameron could cause embarrassment for Jean-Claude Juncker, the European commission president, by insisting that corporate tax avoidance is a central issue at G20 summit in Brisbane on Friday.

Juncker has been accused of presiding over a lax corporate tax regime as Luxembourg prime minister that was designed to attract companies by offering to shift profits and pay minimal corporation tax.

British diplomatic sources said Cameron had been spearheading the fight against corporate tax evasion during the UK presidency of the G8, including mandatory tax information exchange between tax authorities, and wanted to make sure the issue was hard wired into the G20 agenda as well.

Juncker has been battling to defend his reputation and is scheduled to represent the EU in Brisbane, including at a press conference.

Cameron along with Hungary fiercely opposed the recent appointment of Juncker as commission president, but was heavily outvoted. In public Cameron has largely explained his option to Juncker because of the latter’s federalist views. But diplomatic sources added that it had been well known inside the commission that Luxembourg had been resisting progress on tax reform for years.

At present there does not seem to be a political groundswell inside the European parliament to force Juncker to resign, but the political damage to the commission’s reputation is mounting if he remains. Senior Ukip members have called for him to quit, and Cameron may be tempted to say his opposition to his appointment has now been vindicated. He is also likely to seek assurances that Juncker as commission president will pursue the tax agenda vigorously.

Juncker in a hastily called press conference has taken political responsibility for what happened inside Luxembourg during his 18-year premiership, but has claimed he was not the architect of the country’s tax regime adding that the tax authorities acted autonomously.

But speeches by Juncker to Luxembourg’s parliament show him taking personal responsibility as prime minister for striking deals with overseas multinationals to locate their headquarters in the country owing to its favourable tax regime.