European Regulators Open Investigation Into Ikea's Taxes

Andrew Cummings
December 18, 2017

The Ikea inquiry is the latest in series of investigations by European regulators since 2013 into the tax structures of multinational companies operating in Europe and how they are treated by the local tax authorities.

Then in 2011, after the Luxembourg tax scheme was deemed illegal, Inter Ikea arranged a second tax ruling with the Netherlands.

"Member states can not let selected companies pay less tax by allowing them to artificially shift their profits elsewhere", said Margrethe Vestager, European commissioner for competition.

The Greens Party in the European Parliament said Inter Ikea used the Dutch tax advantages to avoid paying almost $1.2 billion in taxes between 2009 and 2014, reported on Monday.

The EC said on Monday: "The Commission considers at this stage that the treatment endorsed in the two tax rulings may have resulted in tax benefits in favour of Inter IKEA Systems, which are not available to other companies subject to the same national taxation rules in the Netherlands".

In its financial year to the end of August Ikea paid €825m in tax on pre-tax profits of €3.3bn.

"Member states can not let selected companies pay less taxes by allowing them to artificially shift their profits elsewhere", she said in the Commission's press statement.

Under EU law, member states can not give selective tax benefits to multinational groups that are not available to other firms.

A senior Dutch EU official said it would look at the details of the case.

Competition commissioner Margrethe Vestager said in a statement: "All companies, big or small, multinational or not, should pay their fair share of tax".

The move against Ikea came at the urging of the Greens party in European Parliament which mounted a major campaign to put the spotlight on Ikea.

In the five investigations concluded to date, officials have ordered four member states to recover billions of euros in total from almost 40 companies including Apple, Starbucks, Fiat and Amazon. This media house does not correct any spelling or grammatical error within press releases and commentaries.

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