Swedish furniture giant Ikea avoided about 1 billion euro in taxes in the 2005 – 2014 timeframe, thanks to some very ingenious fiscal schemes across several European countries, according to a report published by the European Greens.
Belgian and Dutch route as well
Fiscal expert Marc Auerbach was asked by the Greens in the European Parliament to draft a report, showing the fiscal backways used in France, Germany, the United Kingdom, the Netherlands and Belgium.
During the 2005 – 2009 timeframe, Ikea managed to avoid 647 million euro in taxes in Belgium thanks to its “coordination center” technique. Between 2010 – 2014, it used the “notionele intrestaftrek” (Notional Interest Deduction) to avoid 488 million euro in taxes. From 2009 to 2014, Ikea also avoided 1 billion euro in Dutch taxes using the infamous “royalty income” scheme through its Inter Ikea Systems subsidiary, one of its most lucrative techniques.
The Greens in the European Parliament have asked the European Commission to launch an investigative enquiry into Ikea’s tax evasion. Several other companies, like Google, Starbucks and Apple, are already being investigated for similar reasons.
Legal, but contested
The Swedish chain, with a 3.5 billion euro profit in 2015, had little to say about the report for the time being. The board did say the company paid 822 million euro in worldwide corporate tax and another 700 million in other taxes in the past fiscal year alone. “Ikea Group is fully committed to manage its operations in a responsible and sustainable way and we pay our taxes in full compliance with national and international tax rules and regulations”, Ikea said.
Fiscal experts confirm that Ikea is fully with in its legal rights to do what it does and that is not an exception within the corporate world. “Everything they do, is perfectly within the boundaries of the law in a legal-technical sense“, but the general public does not agree with this anymore and that has made these techniques quite contested.
It is not the first time Ikea’s fiscal tricks have been examined. It was part of the LuxLeaks scandal, which revealed all the fiscally friendly rulings the government in Luxembourg created for multinationals. In 2011, there was turmoil once more when Swedish television journalists revealed a secret Ikea foundation in Liechtenstein.
