Ikea tax probe launched by EU

Ikea has become the latest global retailer to come under investigation by the EU after claims a deal with the government of the Netherlands saved the retailer about €1 billion (£880 million).

The Ikea tax probe follows on the heels of similar investigations into Starbucks, Amazon and Apple the latter of which could have to pay the government of Ireland as much as US$15 billion.

The EU says it has launched an “in-depth” investigation into Ikea’s tax affairs after initial findings showed the company used a Dutch subsidiary to reduce its tax bill on revenue from stores all over the world.

“All companies, big or small, multinational or not, should pay their fair share of tax,” the EU’s commissioner Margrethe Vestager said in a statement.

“Member states cannot let selected companies pay less tax by allowing them to artificially shift their profits elsewhere.”

The Ikea tax investigation centres around a subsidiary company Inter Ikea and tax structures in operation since 2006. Inter Ikea is the company established to collect the 3 per cent turnover fee from Ikea franchisees.

The red flag was raised by a Green party investigation tabled in the European parliament last year.

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