EU Opens IKEA Probe

The European Union is opening an in-depth probe into IKEA’s taxation model in the Netherlands, its latest effort to go after sweetheart deals for big multinationals, AP reported. The European Commission, the EU’s executive branch, said it has suspicions that two tax Dutch rulings over the past dozen years have given the Swedish company of flat-box furniture an unfair edge over other firms that have to work under the same Dutch system. Margrethe Vestager, the commissioner responsible for anti-trust matters, said Monday that member states cannot allow a select group of companies to pay less tax than others. The commission, she added will now “carefully investigate” the IKEA case. IKEA shops across the world pay a 3% franchise to Inter IKEA System, a subsidiary of Inter IKEA. Thus, the commission explains, “Inter IKEA Systems in the Netherlands records all revenue from IKEA franchise fees worldwide collected from the IKEA shops.” In similar cases, the EU has also gone after member states to claw back taxes from the likes of Apple, Amazon and Starbucks.