EU-commission targets Ikea with new tax legislations

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Ikea is in focus with the new taxation package from the EU-commission.

”Ikea has a very aggressive solution aiming to not pay any tax at all”, says former prosecutor Eva Joly, member of the EU-parlament.

Her group has come to the conclusion that Ikea has avoided one billion euro in taxes for the last six years.

Ikea’s way of splitting the company in different parts in Europe and moving money between them was first tracked down and revealed by a Swedish TV-documentary.

Three percent of all sales in every European country, about 30 million EUR, is payed as royalty to Inter Ikea in Netherlands – which most likely immediately transfer a part of them to a foundation in Liechtenstein as cross-border royalty payments are tax-free in the Netherlands.

Another part is used to pay for an internal loan from Interogo Finance in Luxemburg. The debt was created when the Ikea brand was bought from Interogo which also lend the money.

Then Interogo pays dividend to the foundation, which is also named Interogo. Thanks to the agreement between Luxemburg and Liechtenstein, only 0.06 percent is payed in tax.

Ikea points out that during 2015, totally 822 million EUR was payed in taxes from the Group.

”Ikea pays taxes in line with national and international rules,” they say in a statement to Swedish paper Dagens Nyheter.

The new tax legislations suggested by the EU-commission wants to limit the possibilities to move assets from one EU-country to another to avoid tax and increase the transparency and exchange of information between the tax authorities.