A tax evasion case has been filed against the Swedish furniture company Ikea. Same scenario has been felt by US companies like Apple, Amazon and Alphabet in Europe.
The complaint states that the furniture company has been evading more than 1 billion euros in tax money over the last six years. The company was said to put the majority of its sales through tax-free countries like Luxembourg, Lichtenstein, and the Netherlands. The Ministers of the European Parliament are asking a deep investigation regarding the issue.
According to sources, Ikea has been moving billions of euros from highly taxed countries to countries that have less or no tax. They are doing this by paying royalty fines, interest and other subsidiaries to its sister company like the Ikea Group in the Netherlands, by doing so they will be paying a small amount of tax compared to what is really required based on their profits.
The European Union has been firm in doing legal actions against these practices. According to the studies, it has cost the continent 70 billion euros every year for these types of cases. Other companies like Google has agreed to pay 130 million pounds worth of back taxes while Amazon was also scrutinized for its practices regarding its financial accounting strategies.
It was only a decade ago when the Swedish furniture group was also examined regarding its operations of network holding companies, subsidiaries and a complex net of tax evading strategies. Journalist and campaigners alike are finding evidence regarding these practices by Ikea. They found out that the company creates a structured corporation that facilitates profit shifting and tax avoidance in a very big level. But the European authorities has not fully addressed the concern until now.
Ikea, on the other hand, didn't comment on the issue. Instead, they insisted that they already made their share in paying the taxes. The company added that in August 2014, they paid 822 million euros in corporate tax during that financial year and an additional 700 million euros in property taxes.
