EU regulators to investigate Ikea's Dutch tax deals
today Dec 18, 2017
EU state aid regulators will investigate whether Swedish furniture retailer Ikea's tax arrangement with Dutch tax authorities helped cut its tax bill, the latest crackdown on unfair tax deals between multinationals and EU countries.
The European Commission said on Monday that it was looking into two tax rulings issued to Inter Ikea, which operates Ikea's franchise business and collects a franchise fee of 3 percent of turnover from all Ikea shops via its subsidiary Inter Ikea Systems in the Netherlands.
"All companies, big or small, multinational or not, should pay their fair share of tax. Member states cannot let selected companies pay less tax by allowing them to artificially shift their profits elsewhere," European Competition Commissioner Margrethe Vestager said.
The Commission said the first tax ruling, which covered 2006 to 2011, resulted in a significant part of Inter Ikea Systems' franchise profits shifting to a Luxembourg unit where it was not taxed.
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.
Fast food chain McDonald’s and French energy company Engie are also in the EU crosshairs over their Luxembourg tax deals.
The Commission has to date ordered Apple to pay a record amount of back taxes up to 13 billion euros (£11.45 billion) to Ireland, Starbucks up to 30 million euros to the Netherlands and Amazon 250 million euros to Luxembourg.
Belgium has been told to recover a total of 700 million euros from 35 companies, among them Anheuser-Busch InBev , BP and BASF because of an illegal tax scheme.
Last month the Commission launched an investigation into a British tax exemption for multinational companies set up by the then-Conservative-led government in 2013 to attract companies to set up headquarters in Britain.
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