Ikea's tax affairs to be investigated

Dutch tax rulings in 2006 and 2011 appear to have reduced Ikea's tax payments in the Netherlands, according to a statement

 

The European Commission said on Monday that it will be investigating Swedish giant Ikea’s tax dealings in the Netherlands.

In a statement, the regulator said that Dutch tax rulings in 2006 and 2011 appear to have reduced Ikea’s tax payments in the country. It is now looking into whether the decisions gave Ikea an unfair advantage over its competitors.

The move is a latest in the crackdown by the EU on sweetheart tax deals, which are granted to multinational companies. Companies such as Amazon, Apple and McDonald’s were previously targeted by the commission.

“All companies, big or small, multinational or not, should pay their fair share of tax,” said Margrethe Vestager, European Competition Competitor.

“Member states cannot let selected companies pay less tax by allowing them to artificially shift their profits elsewhere.”

According to the regulator, Ikea, which operates multiple companies across the Netherlands, Liechtenstein and Luxembourg, may have shifted profits between the countries so as to reduce its tax obligations.

Ikea claimed that it complied with all tax regulations and would gladly cooperate with regulators.

“The way we have been taxed by national authorities, has in our view been in accordance with EU rules. It is good if the investigation can bring clarity and confirm that,” said the firm in a statement.

However, this is not the first time Ikea was scrutinized. A report published in 2016 by a group of EU parliamentarians accused Ikea of using legal loopholes in order to avoid an estimated €1 billion in tax payments, between 2009 and 2014.

Recent EU investigations into illegal state aid resulted in major penalties.

The EU ordered Amazon to pay €250 million in October, after concluding that the company benefited from an illegal tax arrangement with Luxembourg and Apple received a tax bill in 2016, when the EU ordered Ireland to recover €13 billion from the tech company.