Ikea tax evasion claims subject of EU investigation

The world's biggest furniture retailer is the latest multinational to fall under Europe's spotlight after policymakers claim it dodged paying €1 billion.

A warehouse owned by the Swedish furniture maker Ikea in Bordeaux, southwestern France. The company is now under a tax investigation. Olivier Pon / Reuters

European Union regulators who slapped Apple with a €13 billion (Dh53.62bn) tax bill are examining allegations that Ikea dodged at least €1bn in taxes over the past six years.

The competition commissioner Margrethe Vestager, under fire in some quarters for targeting mainly US firms in a clampdown on corporate tax avoidance, said EU officials are vetting claims by Green policymakers that the world’s biggest furniture retailer uses unfair loopholes to avoid paying taxes.

“We have received the documentation that the Greens have made and we are going through it but we have nothing to comment as the case stands right now,” Ms Vestager said on Wednesday, referring to the report published by the Greens/EFA group in the European Parliament. “It is very, very early days.”

Ikea representatives did not immediately respond to a request for comment. At a European parliament hearing in March, Ikea said its tax affairs are in line with international rules, echoing comments by other firms targeted by EU inquiries, including McDonald’s and Apple.

The company on Tuesday posted a 7.1 per cent jump in sales to a record €34.2bn in the past year.

The retailer has a goal for revenue of €50bn by 2020. Ikea’s fiscal year runs from September to August. In the previous year, sales rose by 11.2 per cent.

The holding company of Ikea Group, INGKA Holding, as well as a majority of the group functions and management, are based in the Netherlands.

Responding to the Greens’ report in February, Ikea Group said it paid about €822 million in corporate income tax globally “which equals an effective corporate income tax rate of just below 20 per cent”.

Ms Vestager has been criticised for targeting American technology companies in a rash of tax probes. The European Commission said last month Ireland illegally slashed Apple’s tax bill. Amazon.com is awaiting a decision on its taxes in Luxembourg.

Ms Vestager said the EU has not been targeting just US companies with its tax investigations, highlighting that European companies such as BP have been also forced to pay back taxes. The Danish politician said the decision ordering Apple to pay back taxes shows EU is “definitely open for business, but not for tax evasion”.

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