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TAX

‘Sweden is a tax paradise’: Ikea adviser

A leading figure behind both Ikea and Tetra Pak's decisions to move their headquarter beyond Sweden's borders has said Sweden is making major strides on the road to becoming a more business-friendly nation.

Tax expert Göran Grosskopf, chairman of Ingka Holding, Ikea’s parent company, was instrumental in moving both the flatpack furnisher and packaging giant Tetra Pak out of Sweden for tax purposes. Ikea left for Denmark in 1973 before later switching to the Netherlands, while Tetra Pak set up headquarters in Switzerland in 1981.

But writing in a newsletter ahead of the Transfer of Ownership in Private Businesses conference, to be held in Stockholm at the end of March, Grosskopf claims the companies would have remained on home turf had today’s tax system been in place at the time.

By abolishing inheritance tax, gift tax and wealth tax, Sweden has become attractive to business owners who previously struggled to build up private savings outside of their companies, he claimed

“It’s very important for Sweden and is a fantastically positive development. Sweden is a tax paradise if you set aside income tax. Businesspeople think this is great,” said Grosskopf.

There are however two barriers preventing Sweden from reaching its full potential, according to the Switzerland-based businessman.

“Firstly, a lack of confidence that the reforms will remain in place and, secondly, the fact that Sweden still has both direct and indirect income tax on employment,” he said.

Grosskopf said that both Ikea and Rausing family enterprise Tetra Pak would “without a doubt” have stayed in Sweden if today’s tax conditions had been in place earlier, and if they could be assured that the tax system would remain stable in the long term.

“Taxation of companies and owners is no longer an argument against Sweden, it is an argument in favour of Sweden, said Grosskopf.

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IKEA

Ikea will buy back your used furniture at up to half the price

In the run-up to what would in normal times be the festive season sales rush, Ikea has vowed to buy back used furniture from customers to resell – and pay up to 50 percent of the original price.

Ikea will buy back your used furniture at up to half the price
Got any pieces of Ikea furniture at home? You may be able to get rid of it and get money back. Photo: Fredrik Sandberg/TT

Ikea, the world's largest furniture chain, said Tuesday it would begin buying back used furniture from customers to resell – and pay up to 50 percent of the original price.

The “Buy Back Friday” scheme, timed to coincide with the “Black Friday” pre-Christmas retail frenzy, will run from November 24th and until December 3rd in 27 countries.

“Rather than buy things you don't need this Black Friday, we want to help customers give their furniture a second life instead of making an impulse buy,” said Stefan Vanoverbeke, deputy retail operations manager at Ingka Group, Ikea's parent company.

To address concerns its affordable, flat-pack products encourage overconsumption and waste, the Swedish company had previously said it would start renting and recycling furniture as part of an eco-drive.

Under its buyback scheme, the group said that “anything that can't be resold will be recycled or donated to community projects to help those most affected by the Covid-19 pandemic”.

“Some countries like Australia and Canada for example are currently testing different buyback services, but BuyBack Friday will be the first time that 27 countries do this together,” the statement added.

The Swedish giant employs over 217,000 people and has more than 50 outlets. Its annual turnover is around 40 billion euros ($46 billion).

The group did not specify how it would determine the price paid for second-hand furniture and customers will receive a voucher, not cash, for their products.  

As part of efforts to reduce waste, Ikea has already begun repairing and re-packaging products in every store that have been damaged in transit, as well as allowing customers to return products – including furniture – for resale or donation to charities.

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