Ikea's taxes to be investigated by European Commission

All firms 'big or small, multinational or not, should pay their fair share of tax', European Competition Commissioner Margrethe Vestager said

Commission investigators have been looking at royalties paid by a Dutch entity to a Luxembourg subsidiary holding intellectual property during the period between 2006 and 2010 (Getty)

The European Commission will open an investigation into Ikea’s corporate taxes.

The Swedish furniture giant has one division based in the Netherlands, which the Commission says may have been given unfair tax breaks by the Dutch government.

European Competition Commissioner Margrethe Vestager said all firms “big or small, multinational or not, should pay their fair share of tax”.

Commission investigators are reported to be looking at royalties paid by Ikea’s Dutch entity, Inter Ikea, to its subsidiary in low-tax Luxembourg between 2006 and 2010.

It is the latest EU probe into aggressive tax avoidance measures by multinational firms.

In April, the Commission ordered Amazon to pay €250m (£221m) in back taxes to the Luxembourg government after ruling that a 2003 tax deal amounted to illegal state aid.

The EU’s competition chief has also asked Apple to provide details of its latest tax structure as regulators try to recover €13bn (£11.5bn) in back taxes to Ireland.

Ms Vestager told reporters last month she wanted to make sure Apple complies with EU rules. Ms Vestager ruled in August last year that Ireland had granted the company illegal state aid in the form of generous tax benefits, which allowed the California-based company to pay almost no tax on a significant proportion of its global sales. Apple has appealed the decision.

The news came after leaked documents showed that Apple had chosen to move a subsidiary from Ireland to Jersey in order to continue avoiding billions in taxes, after an EU crackdown in 2013.

Both Apple and Amazon deny any wrongdoing.

A spokesperson for Inter Ikea Systems said the company was committed to paying taxes in accordance with laws and regulations wherever it operates.

"The way we have been taxed by national authorities, has in our view been in accordance with EU rules," the spokesperson added.

"It is good if the investigation can bring clarity and confirm that.

"A state aid investigation is a matter between the European Commission and concerned member states.

"We study the opening decision and we cooperate and respond to any questions the Dutch authorities or the European Commission might have."