Ikea accused of dodging €1bn in taxes

FLAT PACK furniture giant Ikea has been accused of using aggressive tax strategies to avoid €1bn in taxes over the past six years.

Research commissioned by European Parliament group the Greens/EFA claims that the Swedish retailer used “a series of tax loopholes” to shift its profits to several European countries.

The research claims that between 2009 and 2014, Ikea shifted much of its profits to a subsidiary in the Netherlands, which went in and out of the former principality untaxed before ending up in Liechtenstein.

In 2014 alone, the report estimates Ikea failed to pay €35m (£27m) in tax revenues in Germany, €24m in France and €11.6m in the UK.

The report calls for greater tax reforms at European level, including greater anti-avoidance packages to tackle tax loopholes, and greater transparency of multinationals’ activities.

The European Commission has commented on the report, promising to investigate the claims that have been brought forward.

“The commission has taken note of the report and its findings and will study it in detail,” said Vanessa Mock, spokeswoman for the commission on financial services and tax affairs.

In response to the research, Ikea has defended how it manages 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,” said a spokesperson.

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

The report comes just days after Google executive Matt Brittan and vice president Tom Hutchinson were brought before the PAC to explain their company’s £130m tax deal with HMRC, six years after it began an investigation into the firm’s tax affairs. The whole affair has sparked public outrage as to how international companies should pay their taxes.

The European Commission recently revealed that it could investigate the search engine giant’s tax dealings if somebody comes forward and makes a complaint.