Wednesday

8th Jul 2020

EU set to probe Ikea tax affairs

  • The European Commission's Vestager is set to launch a state aid probe against Ikea (Photo: European Commission)

European Commission regulators are reportedly seeking to probe Ikea's corporate tax structure in the Netherlands.

The investigation into the Swedish furniture maker is set to be launched by Margrethe Vestager, the EU's competition chief, reported the Financial Times newspaper on Sunday (17 December).

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An unnamed senior Dutch EU official was also cited in the Wall Street Journal as saying the Netherlands had recently been informed of the possible state-aid inquiry.

The Swedish founded retailer is said to have avoided paying close to €1 billion into public coffers between 2009 and 2014 by using special Dutch tax schemes, according to a report last year by the Greens in the European Parliament.

Ikea has 242 stores in Europe and is owned by the Dutch-based Stichting Ingka Foundation. Ikea's parent company Ingka Holding B.V. is also located in the Netherlands.

Ikea Group's yearly summary report says its corporate income tax amounted to €800 million globally, which it also says is an equivalent effective corporate tax rate of 24.9 percent. Its total revenue for 2017 was €34.1 billion.

The commission's inquiries into aggressive tax avoidance schemes has in the past targeted big US corporate giants like Apple, Starbucks, and Amazon.

Earlier this month, Ireland began to claw back some €13 billion due in back taxes from Apple following a commission investigation into a illegal state aid.

The latest probe into Ikea also follows separate moves by the EU to clamp down on people trying to hide assets in offshore tax shelters.

New anti-money laundering rules

Member states and the European parliament on Friday (15 December) had reached a political agreement on new anti-money laundering rules.

The legislative bill is a revision of the EU's anti-money laundering directive and was proposed as a response to last year's Panama Papers.

The Panama Papers had revealed the offshore holdings of 140 politicians and public officials from around the world following a leak of 11.5 million records from the Panama-based law firm Mossack Fonseca.

The latest rules will allow the public to see who ultimately owns or controls shell companies and is said to help crack down on money laundering, terrorism financing, tax evasion and avoidance.

Laure Brillaud, anti-money laundering policy officer at Transparency International EU, described the agreement on Friday as a major breakthrough.

"The EU deserves credit for taking this bold leap to end the secrecy that facilitates corruption, tax evasion and other crimes," she said in a statement.

Despite the move forward, pro-transparency campaigners say the bill contains a loophole that allows people to remain hidden from the broader public by using trusts.

Access to information on trusts will only be made available to specialised authorities like Financial Intelligence Units.

The latest rules will come into force once formally endorsed by the European parliament and the Council, representing member states. Authorities will then have up to 18 months to transpose the rules into national legislation.

EU forecasts deeper recession, amid recovery funds row

The economies of France, Italy and Spain will contract more then 10-percent this year, according to the latest forecast by the EU executive, as it urges member state governments to strike a deal on the budget and recovery package.

EU plans tougher checks on foreign takeovers

The EU and its member countries are worried that foreign powers, such as China and its state-owned companies will take advantage of the economic downturn and buy up European firms

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