Ikea under scrutiny after tax avoidance claims

Swedish furniture giant Ikea has come under scrutiny from the European Commission following a recent report claiming the company may have underpaid its taxes.

The report, published on February 12 by The Greens/EFA group in the European parliament, claimed Ikea “dodged” €1 billion (£778 million) in taxes between 2009 and 2014 using “onshore tax havens”.

In response to the report, the Commission said it would examine the claims.

“The Commission has taken note of the report and its findings and will study it in detail,” said Commission spokeswoman on financial services and tax affairs, Vanessa Mock.

The Greens report said Ikea used “a series of tax loopholes in different European countries, namely the Netherlands, Belgium and Luxembourg to avoid paying taxes”.

It went on to say: “One of the techniques is shifting royalties from each Ikea store to a subsidiary in the Netherlands, which acts as a conduit. The royalties go in and out of the Netherlands untaxed and end up in Liechtenstein, or at least partly.”

In response to the accusations, Ikea said in a statement: “Ikea Group is fully committed to managing its operations in a responsible and sustainable way and we pay our taxes in full compliance with national and international tax rules and regulations.

“We are committed to further developing our business in Europe and look forward to the continued dialogue on how to develop a harmonised and clear international tax system.”

The report also called for tougher tax measures from the Commission, saying a recent anti-tax avoidance package didn’t go far enough.

Last month, Google agreed to pay £130m in back taxes to Britain after a government inquiry into its tax arrangements. Chancellor George Osborne acknowledged the agreement as a victory, but the sum provoked criticism for being too low.

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