European Union investigating Ikea tax benefits

European regulators 'to investigate Ikea' over tax

Europe investigates Ikea tax evasion via Netherlands

Brussels, Dec 18 The EU today opened an in-depth investigation into Swedish furniture giant Ikea's tax deals in the Netherlands, in the latest salvo by Brussels against the tax affairs of multinationals.

The European Commission said it was looking into two tax rulings issued to Inter Ikea.

In its press release, the Commission stated that it "has concerns that two [Dutch] tax rulings may have given Inter Ikea Systems an unfair advantage compared to other companies".

Ikea also negotiated a deal in 2006 with the tax service allowing it to transfer a significant portion of its profits to Luxembourg, where it is not required to pay tax.

"Member states can not let selected companies pay less tax by allowing them to artificially shift their profits elsewhere", she said.

The EU is investigating if this mechanism is a device to enable Ikea to avoid paying tax on part of its profits.

A 2011 ruling, brought in after the Commission declared the first deal illegal, allowed a substantial part of the company's franchise profits after 2011 to be transferred to its Liechtenstein parent.

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The Commission has recently ordered firms including various member states to collect billons of euros' worth of back taxes from Apple, Starbucks, Amazon and Fiat.

Information is limited as Ikea is not a public company and, like most multinational groups, it is formed of a large number of subsidiary companies in numerous jurisdictions. "The Netherlands fully supports the Commission's work".

Separately, Belgium was required to recover about € 700m in tax from about 35 companies that benefited from a generous scheme.

This marks the latest crackdown on unfair tax deals between multinationals and European Union countries.

The EU is also conducting investigations into McDonald's, the fast-food chain; Engie, the French utility; and a United Kingdom tax scheme for foreign-controlled corporations.

The European Commission and IKEA declined to comment.

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