The European Commissioner Margrethe Vestager announced today the opening of an investigation into the tax affairs of IKEA. The inquiry focuses on two rulings issued to the company by the Netherlands related to the licence fees paid by IKEA stores in their franchise system and the price of the IKEA brand acquired through a loan. The Commission raises concerns which were uncovered by our study which estimated the total tax to at least 1 billion Euro between 2009 and 2014. For Sven Giegold, tax spokesperson of the Greens/EFA group in the European Parliament, this inquiry is a direct consequence of the report the Greens/EFA group published in February 2016 that already highlighted doubtful tax practises of the Swedish company (1):
“Europe shows its teeth against tax dodging. As many other big companies, IKEA has been using a series of tax loopholes for years to avoid paying taxes. It is the duty of the European Commission to stop these unfair behaviours and make sure that companies pay their taxes where they make their profits. The investigation should not be limited to the Netherlands, obviously the core of IKEA’s tax avoidance system, but should also look at Luxembourg and Belgium.
I expect that in the end IKEA has to pay back state aid to the Dutch state. We do not talk about peanuts in missing tax revenues. In 2016, we estimated that IKEA may have shifted 1 billion Euro between 2009 and 2014; revenues which could be used for schools, hospitals or investment in public transports. IKEA’s tax practises is a theft to society.
This investigation is a great recognition of the Greens/EFA work to end tax dogging in the European Union. The European Commission’s enforcement arm, acting as the police of EU competition law is absolutely crucial to ensure fair taxation in the EU, especially when we know that many tax reforms are being blocked by the EU Member States. We therefore encourage Commissioner Vestager to look into several other harmful regimes, starting with patent boxes for example.”
(1) Greens / EFA report on IKEA + video + infographics: https://www.greens-efa.eu/en/article/corporate-tax-avoidance-5963/
Letter of the Greens/EFA group to the Commissioners Vestager and Moscovici (February 2016) on IKEA:
Report of the Greens/EFA group on the tax dodging practices of IKEA: