Jana Ariss
On Tuesday, Dec. 19, Margrethe Vestager, European Commissioner on commercial competition, announced the investigation of IKEA’s tax construction in the Netherlands.
Suspected of evading up to a billion euros in taxes between 2009 and 2014, IKEA has established a unique financial system that allows them to pay less corporation tax.
Photo Courtesy of The IPKat
The Swedish-based retailer has a Dutch franchiser accused of the evations. This is opposed to the IKEA retailers that sell furniture. The Dutch franchiser, nam
ed Inter IKEA , receives 3% of its annual revenues from the IKEA retailers. These royalties are not subject to taxation under Dutch law. This allows the retailer to escape thousands in taxes in that area.
Other major corporations alongside Inter IKEA , such as Starbucks, Apple, Fiat, and Amazon, also have to repay millions of euros in evaded taxes.
Last week, the European commission forced Ireland to collect €13 billion from Apple, however, Ireland will continue to argue that the taxes are not required. Inter IKEA is not alone as Apple faces an overwhelming amount of tax battles in Europe.
The Commision ordered Luxembourg to collect €250 million in back taxes, taxes not paid when they were due, from Amazon this October, and the European countries appealed against the case.
Margrethe Vestager responds to a question
regarding the issue
Photo Courtesy of Politico Europe
Inter IKEA Systems falls into a potential in-depth investigation across multiple European nations, including Luxemburg and Belgium. None of the other companies face this ordeal.
IKEA has be
en cooperative in the investigation and claimed, “The way we have been taxed by the national authorities in our view has been in accordance with EU rules. It is good if the investigation can bring clarity and confirm [that its tax deals in the Netherlands did not break EU laws].”
This investigation follows a long-running campaign by the Green Party in European Parliament. As Europe begins to discover and expose more companies guilty of avoiding certain taxes, this leads to an era in which companies will be more honest and held responsible for their misinterpreted actions.
