Business European Union Will Investigate IKEA Taxes

The EU Commission will open an in-depth investigation into the corporate tax structure of IKEA, a leading furniture retailer and furniture from Sweden.

One of the Ikea divisions in the Netherlands, the Inter IKEA, is suspected of obtaining unfair tax benefits in the Land of the Windmill.

EU Competition Commissioner Margrethe Vestager says all companies, large or small, multinational or national, must pay taxes fairly. The EU will see whether Ikea tax collides with EU rules.

Under EU law, member states can not provide certain tax benefits to multinational corporations not provided to other companies.

"The Commission has considered that taxation (the Netherlands) has benefited Inter Ikea Systems compared to other companies," the EU Commission wrote in a statement.

This step is the latest done by the EU's competition authorities regarding the tax agreements between EU countries and multinational corporations.

As for the Inter Ikea Group states, the amount of taxes charged has been in accordance with the rules of the European Union.

"It is very good if the investigation can provide clarity and confirmation," said a spokesman for Inter Ikea Group.

The EU Commission's investigation on Ikea will focus on two tax agreements between the Netherlands and Inter Ikea. Allegedly, there is a decrease in tax-related income in the Netherlands.

Inter Ikea operates the Ikea franchise business in the Netherlands. The EU Commission stated that in 2006 Inter Ikea may pay license fees to other Ikea units in Luxembourg, thereby transfers to tax-free countries.

Then in 2011, Inter Ikea made a second tax deal with the Netherlands related to a loan with IKEA's unit in Liechtenstein, allowing IKEA to move its profit to a low-tax country.