EU opens investigation into Ikea’s tax affairs

The European Commission has opened an in-depth investigation into the Netherlands’ tax treatment of Swedish retailer Ikea. It follows concerns that two Dutch tax rulings may have given the company an unfair advantage contrary to EU state aid rules.

Since the early 1980s Inter Ikea group has operated the franchise business of Ikea. Inter Ikea Systems in the Netherlands records all revenue from Ikea franchise fees worldwide.

The investigation concerns the tax treatment of Inter Ikea Systems in the Netherlands since 2006. In that year a tax ruling endorsed a method to calculate an annual licence fee to be paid by Inter Ikea Systems in the Netherlands for the use of intellectual property rights to another group company I I Holding based in Luxembourg. As a result a significant part of Inter Ikea Systems’ franchise profits was shifted to I I Holding where they...