Dutch government to help investigate Ikea’s tax affairs in the Netherlands

By:

Simone Rensch

19 Dec 17

The Dutch government has said it will cooperate with the European Commission investigation into Ikea’s tax arrangements in the Netherlands, as part of an EU crack-down on aggressive corporate tax avoidance.

The European regulator has launched investigations into Dutch tax rulings that enabled the Swedish-founded multinational group to significantly cut its tax bills since 2006 – of up to €1bn.

Findings from the European Commission suggested the company has been able to use a Dutch subsidiary to reduce its tax bill on revenue from stores around the world.

EU competition commissioner Margrethe Vestager said: “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. We now carefully investigate the Netherlands’ tax treatment of Inter Ikea.”

The Dutch Finance Ministry said in a letter to the European parliament on Monday that it would cooperate in the inquiry into its tax agreements with the Swedish furniture company.

The European Council published a blacklist of 17 countries classified as tax havens, but the list did not include EU member states.

But NGOs warned that a number of member states would meet the criteria of tax havens, according to the bloc’s own rules. These countries include Ireland, Luxembourg, the Netherlands and Malta.

The two Dutch rulings being investigated were made in 2006 and 2011. The first endorsed a tax arrangement that the company used to shift part of its revenue to a tax scheme in Luxembourg that was exempt from corporation tax.

The scheme was declared illegal by the European Commission in 2011, but IKea then restructured its business and has been alleged of using an intercompany loan to offset tax.

The company has joined Starbucks, Amazon and Apple on the European watchlist of big corporations avoiding tax.

Inter Ikea said in a statement: “Inter Ikea Group including its subsidiary Inter Ikea Systems BV is committed to paying taxes in accordance with laws and regulations wherever we operate.

“The way we have been taxed by national authorities, has in our view, been in accordance with EU rules. It is good if the investigation can bring clarity and confirm that.

It added that the state aid investigation is a matter between the European Commission and concerned member states.

The statement continued: “We study the opening decision and we cooperate and respond to any questions the Dutch authorities or the European Commission might have.”