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| Ikea's tax affairs to be investigated by the EU | Ikea's tax affairs to be investigated by the EU |
| (35 minutes later) | |
| The European Commission is to open an in-depth investigation into Ikea's corporate tax structure. | The European Commission is to open an in-depth investigation into Ikea's corporate tax structure. |
| The Commission said Dutch-based Inter Ikea, one of the Swedish giant's two divisions, may have been given unfair tax advantages by the Netherlands. | |
| European Competition Commissioner Margrethe Vestager said all firms "big or small, multinational or not, should pay their fair share of tax". | European Competition Commissioner Margrethe Vestager said all firms "big or small, multinational or not, should pay their fair share of tax". |
| The EU will look at whether Ikea's tax affairs breach EU rules on state aid. | The EU will look at whether Ikea's tax affairs breach EU rules on state aid. |
| Under EU law, member states cannot give selective tax benefits to multinational groups that are not available to other firms. | |
| "The Commission has concerns that two [Dutch] tax rulings may have given Inter Ikea Systems an unfair advantage compared to other companies," it said. | |
| Two tax deals | |
| The Commission's inquiry is focused on two tax agreements between the Netherlands and Inter Ikea which it alleges "have significantly reduced" the firm's taxable profits in the Netherlands. | |
| Netherlands-based Inter Ikea operates the franchise business of Ikea. It collects royalties from other parts of Ikea and pays little tax on the proceeds. | |
| The Commission says that in 2006, a Dutch tax ruling enabled Inter Ikea to pay a "significant" annual licence fee to another Ikea unit in Luxembourg, thereby shifting revenue to a jurisdiction where it remained untaxed. | |
| Then in 2011, after the Luxembourg tax scheme was deemed illegal, Inter Ikea arranged a second tax ruling with the Netherlands. | |
| This ruling focused on a loan deal with an Ikea unit in Liechtenstein, which enabled Inter Ikea to shift "a significant part of its franchise profits" to a low-tax jurisdiction. | |
| A senior Dutch EU official said it would look at the details of the case. | |
| "The Netherlands fully supports the Commission's work," they added. | |
| The move is the latest crackdown by the EU competition authority on tax deals between EU countries and multi-nationals. | |
| It has recently ordered firms including various member states to collect billons of euros' worth of back taxes from Apple, Starbucks, Amazon and Fiat. | |
| The European Commission is worried that giant companies gain an unfair advantage over smaller rivals which have no chance of using similar tax schemes. |