EU regulators to investigate Ikea's Dutch tax deals - Metro US

EU regulators to investigate Ikea’s Dutch tax deals

FILE PHOTO: A family is seen in front of an Ikea shop in a mall in Rome, Italy, May 19, 2017. REUTERS/Max Rossi/File Photo
By Foo Yun Chee

By Foo Yun Chee

BRUSSELS (Reuters) – EU competition regulators will investigate whether Swedish furniture retailer Ikea’s [IKEA.UL] tax arrangements with the Netherlands which cut its tax bill in a way which amounted to state aid, as the authorities seek to crack down on unfair tax deals between multinationals and EU countries.

The European Commission said on Monday it was looking into two Dutch tax rulings for Inter Ikea, which operates Ikea’s franchising and brand rights and collects a fee of 3 percent of turnover from all Ikea shops via Inter Ikea Systems, a subsidiary in the Netherlands.

“All companies, big or small, multinational or not, should pay their fair share of tax. Member states cannot let selected companies pay less tax by allowing them to artificially shift their profits elsewhere,” European Competition Commissioner Margrethe Vestager said.

The Commission said the first tax ruling, which covered 2006 to 2011, resulted in a significant part of Inter Ikea Systems’ franchise profits shifting to a Luxembourg unit where it was not taxed.

A 2011 ruling, brought in after the Commission declared the first deal illegal, allowed a substantial part of the company’s franchise profits after 2011 to be transferred to its Liechtenstein parent.

Inter Ikea said it and Inter Ikea Systems were committed to paying tax in line with the laws of the countries in which they operate and it believed that the way it had been taxed was in accordance with EU rules.

The Dutch government said it would cooperate with the EU investigation.

Fast food chain McDonald’s and French energy company Engie are also in the EU crosshairs over their Luxembourg tax deals.

The Commission has to date ordered Apple to pay a record amount of back taxes up to 13 billion euros ($15.3 billion) to Ireland, Starbucks up to 30 million euros to the Netherlands and Amazon 250 million euros to Luxembourg.

Belgium has been told to recover a total of 700 million euros from 35 firms, among them Anheuser-Busch InBev , BP and BASF because of an illegal tax scheme.

Last month the Commission launched an investigation into a British tax exemption for multinational companies set up in 2013 by the then-Conservative-led government to attract companies to set up headquarters in Britain. ($1 = 0.8482 euros)

(Additional reporting by Olaf Swahnberg in Stockholm and Anthony Deutsch in Amsterdam; editing by Mark Heinrich, Greg Mahlich)

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