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Ikea's 'loophole' taxes spark EU investigation

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An Ikea store in Germany. Photo: Markus Schreiber/AP/TT
14:23 CET+01:00
The Swedish furniture giant may have avoided paying at least one billion euros in taxes, it has been claimed.

Ikea may have dodged a huge chunk of its tax bill 2009 and 2014 due to aggressive "loophole" strategies, according to research commissioned by the Greens and European Free Alliance (EFA) group of politicians in the European Parliament.

The executive arm of the EU, the European Commission, has said it will study the findings which claim that the furniture company "structured itself to dodge one billion euros in taxes over the last six years using onshore European tax havens".

"The commission has taken note of the report and its findings and will study it in detail," commission spokeswoman on financial services and tax affairs Vanessa Mock said in response to the allegations.

According to the Greens, Ikea uses "a series of tax loopholes in different European countries, namely the Netherlands, Belgium and Luxembourg to avoid paying taxes", the statement said.

"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," it added.

Ikea has defended its management of its tax affairs.

"IKEA Group is fully committed to manage its operations in a responsible and sustainable way and we pay our taxes in full compliance with national and international tax rules and regulations," it said in a statement.

"We are committed to further develop our business in Europe and look forward to the continued dialogue on how to develop a harmonized and clear international tax system," it added.

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The report by the Greens/EFA was first published on Friday but only grabbed headlines in Sweden on Monday. It also calls for tougher tax measures from the commission, saying that a recent anti-tax avoidance package did not go far enough.

The claims come amid growing public outrage about tax avoidance by multi-national corporations.

Last month Google agreed to pay the equivalent of $185.4 million (172 million euros) in back taxes to Britain after a scathing government inquiry into the search giant's tax arrangements.

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