kea’s tax deals with the Netherlands will be investigated by European Union regulators, the latest target in a crackdown that’s already resulted with Apple facing a bill of billions of euros in back taxes.
Inter Ikea Group, which operated the furniture store’s franchise business, may have been able to pay less tax, winning an advantage over rivals, the European Commission said in an emailed statement Monday. It will probe a 2006 tax deal on how the firm calculates a license fee paid by a Dutch Ikea unit to a Luxembourg branch where it was exempted from tax. The EU will also probe a 2011 tax ruling on how the Dutch company paid tax on payments to a Liechtenstein unit.
Ikea may have avoided paying at least 1 billion euros ($1.2 billion) in tax from income from stores from 2009 to 2014, according to a report by Greens/EFA lawmakers submitted to the EU last year. EU Competition Commissioner Margrethe Vestager said the EU was vetting those claims. Green lawmakers have also flagged Inditex SA, the owner of Zara stores, as using "aggressive" techniques to sidestep taxes.
A probe into Ikea, one of Europe’s best-known brands, may lift some criticism Vestager has received for focusing on how US companies may use different methods to reduce taxes. She’s already ordered Starbucks and Amazon.com to repay tax while a probe of McDonald’s is continuing. She also is suing Ireland for a delay in reclaiming billions of euros from Apple.
At a European Parliament hearing in last year, Ikea said its tax affairs are in line with international rules, echoing comments by other firms targeted by EU probes, including McDonald’s and Apple.
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