Ikea may be forced to pay a historic tax bill worth millions of euros as a two-year investigation by the European Commission comes to its imminent conclusion of an investigation.
The investigation could see “Inter Ikea” which is The Netherlands-based operator of Ikea’s franchise business forced to pay back millions of euros in back tax.
Apparently, the investigation focused on Inter Ikea’s franchise business and came around after an EU parliament report discovered Ikea allegedly avoided paying €1 billion over a six-year period.
The Commission said Dutch authorities granted Ikea two tax rulings which reduced its taxable profit in The Netherlands and giving it an unfair advantage.
The first ruling in 2006 saw a large part of Ikea’s franchise profits were moved to a Luxemburg unit and not taxed.
A second ruling in 2011 led to a large number of franchise profits transferred to a Liechtenstein-based parent company.
Ikea believes it paid the correct amount of tax.
“Just like all other companies working under the Ikea trademark, Inter Ikea Systems BV is committed to paying taxes in accordance with laws and regulations wherever we operate,” the retailer said.
“We believe that we also in these cases have paid the correct amount of tax.” they further went on to state.