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Corporate tax dumping: IKEA cheating EU governments out of massive tax revenue according to new research

A new investigative report, commissioned by the Greens/EFA group in the European Parliament, on the tax strategy of the IKEA  coporation has revealed the details of the system they employ to avoid taking their tax responsibility across the EU. IKEA exploits tax benefits in the European Union, specifically in Luxembourg, the Netherlands and Belgium. Thereby, the company avoided tax payments of an estimate of at least €1 billion to EU member states over the past six years. Accordingly, the German state and its municipalities lost 35 million of revenues only in the year 2014.

The Greens have written to EU competition commissioner Margrethe Vestager and tax commissioner Pierre Moscovici, presenting the report as evidence and urging the Commission to carry out a further investigation for possible infringement of EU state aid law.

MEP Sven Giegold, financial and economic policy spokesperson of the Greens/EFA group commented on the findings and their consequences:

“IKEA has ruthlessly avoided its tax responsibility and created a huge damage to European countries’ tax revenues. It’s a slap in the face of taxpayers that large corporations are still able to avoid billions of taxes in the European Union. IKEA created a sophisticated system to deprive national exchequers of billions of Euro in tax revenue. Loopholes in the tax systems of several EU countries such as Luxembourg, Belgium and the Netherlands, facilitated IKEA’s tax avoidance. It’s a scandal that large corporations can easily shift money from one EU country to another to avoid taxes. IKEA is an extremely ruthless case of tax migration, because the multinational shifted its tax structuring several times between Belgium, the Netherlands, Luxembourg and Liechtenstein. The EU Commission must no longer close their eyes and needs to fully investigate if and how IKEA infringes on EU law. IKEA and the concerned governments have to take responsibility for the damage to the countries’ tax revenues.

IKEA is just the latest example of a major multinational expoiting tax competition in the European Union. Tax dumping in the European Union has to be ended. The European Union has to improve its proposals from late January. The study shows that the current proposals of the EU Commission cannot prevent tax avoidance systems like IKEA’s. We badly need public country-by-country reporting rules for all sectors to provide transparency and ensure the tax strategies of corporations can be systematically detected. We also finally need a common consolidated corporate tax base to end the race to the bottom of tax dumping in Europe.”

Please find the whole research here: Download

Please find here our letter to Commissioners Vestager and Moscovici: Download



The European media response

UK & International: http://www.ft.com/intl/cms/s/0/28a1109e-d1a1-11e5-831d-09f7778e7377.html#axzz3zykciRUY

France: http://www.lemonde.fr/economie/article/2016/02/12/ikea-les-eurodeputes-verts-denoncent-les-montages-fiscaux-du-geant-suedois_4864630_3234.html

Italy: http://www.repubblica.it/economia/2016/02/13/news/_ikea_ha_eluso_un_miliardo_di_tasse_in_europa_-133317194/

Germany: http://www.spiegel.de/wirtschaft/unternehmen/ikea-nutzt-steuerdumping-der-beneluxlaender-a-1077063.html

Germany: http://m.welt.de/wirtschaft/article152207581/Mit-diesen-Tricks-reduziert-Ikea-seine-Steuerlast.html

Austria: http://derstandard.at/2000031002122/Ikea-Steuervermeidung-ueber-Lizenzzahlungen-unter-Beschuss?ref=article

Austria: http://diepresse.com/home/wirtschaft/economist/4925074/So-minimiert-Ikea-seine-Steuerlast-auch-in-Osterreich?from=suche.intern.portal

Belgium (Flanders): http://www.demorgen.be/economie/-belastingontwijking-ikea-moet-onderzocht-worden-bf48b8dc/

Belgium (Flanders): http://www.standaard.be/cnt/dmf20160212_02124957

Belgium (Wallonia): http://plus.lesoir.be/25570/article/2016-02-12/comment-ikea-soustrait-1-milliard-aux-fiscs-europeens#_ga=1.118586634.221175851.1382220716

Finland: http://www.talouselama.fi/uutiset/raportti-ikea-valtti-miljardin-verot-euroopassa-sama-kikka-kuin-applella-6303567

Netherlands: http://www.volkskrant.nl/economie/ikea-ontweek-via-nederland-een-miljard-aan-belasting~a4243623/

Luxembourg: http://www.wort.lu/de/business/steuervermeidung-ikea-spart-eine-milliarde-euro-an-steuern-via-luxemburg-56be0a4e0da165c55dc52c3a

Spain: http://economia.elpais.com/economia/2016/02/12/actualidad/1455290295_084633.html

Spain: http://www.expansion.com/empresas/2016/02/13/56bf04e046163f9a5b8b45fc.html

Spain (Catalonia): http://www.lavanguardia.com/edicion-impresa/20160213/302119549639/los-verdes-del-parlamento-europeo-acusan-a-ikea-de-ingenieria-fiscal.html

Spain (Catalonia): http://www.ara.cat/economia/Ikea-eludeix-1000-milions-impostos-UE_0_1522047811.html

Spain (Catalonia): http://www.elperiodico.com/es/noticias/economia/los-verdes-europeos-denuncian-ingenieria-fiscal-ikea-4894583

Switzerland: http://www.nzz.ch/wirtschaft/wirtschaftspolitik/ikea-am-pranger-1.18694537

Sweden: http://www.dn.se/ekonomi/ikea-undviker-miljardbelopp-i-skatt/

Sweden: http://www.svt.se/nyheter/ekonomi/svidade-kritik-mot-ikea-i-ny-eu-rapport

Ireland: http://www.irishtimes.com/business/retail-and-services/ikea-may-have-underpaid-taxes-by-1bn-in-eu-report-claims-1.2532889

International: http://www.ibtimes.co.uk/ikea-accused-1bn-tax-evasion-europe-1543627

International: http://fortune.com/2016/02/12/ikea-tax-avoidance/